Rathdowney Resources options Mallow project in Ireland to Antofagasta

Zinc and lead explorer Rathdowney Resources (CVE:RTH) said Tuesday it has optioned off the Mallow zinc-lead project in Ireland to Antofagasta Plc (LON:ANTO).
The 337 square kilometre property rests south of the Pallas Green mineral district in Ireland, which consists of 11 prospecting licenses.
Antofagasta Minerals, a unit of Antofagasta Plc, could earn a 75 per cent interest in the property if it spends $250,000 in the first 12-months and exercises two options.
Under the first option, Antofagasta can earn a 51 per cent interest by spending $3 million over three years in expenditures.
Antofagasta can then boost its stake in the Mallow project to 75 per cent by paying another $3 million in expenditures over the subsequent three years.
Once Antofagasta earns a 75 per cent stake or decides not to elect its second option, both companies will contribute to on-going exploration of the property in proportion to their respective interests.
If Rathdowney or Antofagasta’s stake becomes less than 10 per cent, then their interest would convert to a 1.5 per cent net smelter return royalty.
"We are pleased to have completed this agreement with Antofagasta, which will provide funding for ongoing exploration at Mallow,” Rathdowney’s chief executive John Barry said in a statement.
"It also enables to the company to focus its efforts on further advancing its Olza Zinc-Lead Project in Poland."
The Olza project is a Mississippi Valley Type zinc-lead prospect in Poland's historic Silesian mining district, an area with extensive mining infrastructure, including power and rail.
The project, also near a state-owned zinc smelter complex, is expected to have additional smelting capacity when the Pomorzany mine closes in the next three to five years.
Last week, Rathdowney updated investors on drilling results from its Olza zinc project northwest of Krakow in southern Poland, saying additional holes have been drilled that will be included in the resource estimate.
The zinc and lead explorer stressed that the compilation of results and resource modelling is progressing according to plan.
But a number of the additional holes to be included in the resource report are currently awaiting final quality control approval and are expected to be released shortly. Rathdowney's initial goal was to release its first resource estimate for the project by mid-year, but it will now wait to allow the inclusion of the additional holes.
Highlights of recent drilling include 2.30 metres of 19.66% zinc in hole OLZ-078, and 17.72% zinc over 3.25 metres in hole OLZ-102. In addition, hole OLZ-096 returned 5.05% zinc over 14.7 metres.
The Vancouver-based company’s share price closed Friday at 44 cents apiece on the TSX Venture Exchange.