A predicted tungsten shortage has prompted Plymouth Minerals to acquire an 80 per cent stake in Aurum Mining’s Morille project for $420,000.
Morille is a 5796-hectare brownfield exploration and development site in Spain’s northwest, comprising five investigation permits with multiple historic underground and open pit tungsten and tin mines.
Plymouth was confident it would recover high grade minerals in the area, as it historically produced high grade tungsten concentrate until a fall in the commodities price forced the mine to close in 1985.
Plymouth managing director Adrian Byass said he looked forward to developing the project with partner Aurum Mining.
“The Morille project brings together the specialty metal and development skills of the Plymouth board and management and combines them with an advanced tungsten project in a tungsten producing region,” he said.
“The tungsten price is robust with strong fundamentals going forward.
“This acquisition complements other projects currently under review by Plymouth in the region and is further evidence of the company’s growing regional focus in the Iberian Peninsula.
“We consider the acquisition has exciting potential to deliver a solid tungsten project in a mining friendly district, and the company remains well funded to acquire the project.” Plymouth can acquire Aurum’s 20 per
cent at any time for £2.5 million or, if the company wanted to sell its interest, Plymouth would be eligible for 30 per cent of the profit.
Aurum chairman Sean Finlay said the deal was a win-win as Plymouth had the expertise to maximise the project.
“In response to very challenging market conditions, the company previously stated its intention to seek strategic investors and industry partners to assist in funding its portfolio of gold and tungsten projects in
northwest Spain,” he said.
“The proposed deal will not only ensure the ongoing funding of the Morille project, but will also enable Aurum to realise some cash and to retain a significant residual stake in a highly prospective project.
“In addition to Plymouth having the balance sheet to drive the project forward, the board also believes Plymouth has the necessary skill set to maximise value from the project and to therefore realise optimal
value for Aurum’s residual shareholding.”
A drilling program is expected to begin in late 2013 or early 2014.