PERTH (miningweekly.com) – ASX-listed explorer Rafaella Resources has struck a binding heads of agreement with PanEx Resources to acquire the Borralha and Vila Verde tungsten projects, in Portugal.

Rafaella would acquire Pan Iberia from PanEx Resources, which through its subsidiary PanMetals Unipessoal, holds the rights to acquire 100% of the Borralha project, and 90% of the Vila Verde projects.

The two projects are located 210 km and 250 km respectively from Rafaella’s own Santa Comba tungsten project, and both have long mining histories.

“This is an important acquisition for the company as we position ourselves to become a leading Western European supplier of tungsten, a critical metal facing significant supply chain risks due to the dominance of supply from China,” said Rafaella MD Steven Turner.

“The Borralha and Vila Verde deposits are widely considered the most attractive undeveloped tungsten projects in Portugal. With Santa Comba advancing through the feasibility study and with the openpit permit application to be submitted in 2022, the addition of these Portuguese projects provides Rafaella with a portfolio of resources in various stages of the development cycle. The recent award of the 25-year mining exploitation licence for Borralha gives comfort of tenor and a clear path to development.

“Rafaella will be able to apply many of its findings at Santa Comba to the Borralha and Vila Verde development programmes. We look forward to updating the market on the outcome of the due diligence and the results of the maiden Joint Ore Reserves Compliant (Jorc) mineral resource estimate.”

Under the terms of the agreement, Rafaella would acquire the projects for a total consideration of €4-million, based on a Jorc mineral resource of at least 25 000 t of tungsten at Borralha, with a minimum grade of 0.14%. If the resource estimate is less than the target, a pro-rata adjustment will be made to the consideration, with a minimum of €2-million payable.

The consideration is payable in cash and shares, with the first €1-million to be paid in cash and the balance in Rafaella shares.

The execution of a final agreement is subject to the completion of due diligence and the receipt of the necessary third-party approvals. The execution of a definitive transaction is expected by the end of January next year.