Encounter shares rise on Antofagasta deal
PERTH (miningweekly.com) – The share price of ASX-listed junior Encounter Resources increased by some 29% on Tuesday, on news that the company has signed a $20-million earn-in agreement with London-listed copper miner Antofagasta.
Under the terms of an earn-in agreement, Antofagasta could earn a 51% interest in Encounter’s Yeneena project by spending the $20-million over a five-year period.
Antofagasta would also complete a private placement and would inject some A$1.9-million into Encounter, with existing Encounter shareholders being offered the opportunity to subscribe for additional shares at the same price as the Antofagasta placement.
The copper miner would also have an option to earn a further 19% shareholding in the project if Encounter elected not to contribute further to funding and development studies, by sole funding the completion of the prefeasibility study within four year’s of Encounter’s decision not to contribute.
“We are delighted to welcome Antofagasta, a subsidiary of one of the world’s largest copper producers and explorers, onto our share register and into an earn-in agreement over two tenements within the Yeneena project,” said Encounter MD Will Robinson.
The company noted that the transaction was a significant endorsement of the large-scale copper potential at Yeneena, and adding that Antofagasta brought considerable financial, technical and operating resources to progress copper discoveries made at the two tenement areas.
“This relationship will ensure a fully funded exploration programme and if successful, provides a path towards production with a major copper producer,” said Robinson.
The Yeneena project covers some 1 400 km2 of the Patersons Province, in Western Australia, with its targets located adjacent to major regional faults.
Encounter’s shares were trading at a high of 22.5c a share on Tuesday, up from a low of 20c a share.
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