Monday, 1 October 2012

Rathdowney Resources options out Irish properties to Teck subsidiary


Vancouver-based Rathdowney Resources (CVE:RTH) says it has optioned out 31 of its prospecting licenses in the Irish Midlands zinc-lead district to Teck Resources' (TSE:TCK.B) Irish subsidiary. 
The licenses comprise the Westmeath South, Westmeath North, Galway, Laois, Longford and Meath properties in Ireland. 
"Rathdowney's work on these prospecting licenses in Ireland has provided  a solid platform for Teck Ireland to advance exploration and include in  its regional geophysical surveys, targeting major concealed zinc-lead  mineralizing systems," said Rathdowney's CEO and president, John Barry, in a statement Monday.
"Rathdowney retains significant participation in any major economic discovery, while being able to focus its current  resources on the Project Olza zinc-lead project in Poland."
The Teck subsidiary will have the option to acquire a 100 per cent interest in the prospecting licenses by spending C$4.39 million on or before December  31, 2016.  
Rathdowney will retain a 2 per cent net smelter returns royalty on minerals extracted from the areas covered by the licenses, with the acquisition still subject to Ministerial approval in Ireland. 
Once the approval is secured, Teck will also make a C$350,000 private placement in Rathdowney by subscribing for 700,000 common shares at 50 Canadian cents each. 
The placement still needs approval from the TSX Venture Exchange, Rathdowney said. 
The junior zinc and lead explorer is focused on its Olza project in Poland, located in the prolific Upper Silesian Mineral District, an area of extensive Mississippi Valley-type deposits in which zinc-lead mining has taken place since the 12th century.
Last week, Rathdowney was granted a third exploration concession, expanding its Olza zinc-lead property to now cover some 150 square kilometres. The third concession, called Chechlo, covers 50.8 square kilometres and is next to the company's Rokitno concession. 
The concession was granted to Rathdowney's Polish subsidiary by the Ministry for the Environment for a period of five years, the company said late Thursday. 
The Chechlo concession lies to the southwest of project Olza, for which the company released a maiden NI 43-101 compliant resource in September, along the  same "richly-mineralized" zinc-lead trend, Rathdowney said. 
The concession has seen  little exploration activity compared to other parts of the property. 
The miner noted that during the 1950-1970s, the Polish State conducted limited diamond drilling  of around 125 holes over  an area of roughly 18 square kilometres, but that the majority of the  Chechlo concession remains unexplored. 
The company is finalizing plans for a 5,000 metre drilling campaign on selected targets at Chechlo and other parts of the Olza project. 
The ultimate aim is to expand the mineral resources at the Olza project, which the company recently defined in a NI 43-101 report. 
At a 2.0 per cent zinc cutoff, these inferred mineral resources stand at 21.2 million tonnes grading 7.42 per cent combined zinc and lead - or 5.88 per cent zinc and 1.54 per cent lead.  
The Olza project is near a state-owned zinc smelter complex that is expected to have additional smelting capacity when the Pomorzany mine in the region closes in the next three to five years.
The surrounding infrastructure at Olza, as well as the expected increase in zinc prices as supply wanes over the medium term, bodes well for Rathdowney Resources and the development of its Polish property. 
Rathdowney's stock closed at 47.5 cents on Friday, up almost 8 per cent in the last month.

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