The Lomero-Poyatos gold-rich massive sulphide deposit is located within the Iberian Pyrite Belt (IPB), Spain’s premier mineral district and the largest volcanogenic massive sulphide (VMS) province on Earth. The IPB contains more than 80 deposits, including the giant deposits of Rio Tinto, Tharsis and La Zarza that were mined by the Romans.
Renewed recognition of the district’s mining potential and new pro-mining government policies have recently brought an influx of major international companies and mining investment to the region. First Quantum, Trafigura, Lundin Mining, EMED Mining and Glencore-Xstrata have acquired operating mines and development projects. The recent investment has also produced a discovery called Minas Magdalena, a new copper deposit under development by Trafigura.
Lomero-Poyatos lies just 8km west of the Aguas Tenidas copper-gold mine operated by Trafigura, and 35km west of the giant Rio Tinto copper deposit, under re-development by EMED Mining.
Prior to its closure in 1991, Lomero-Poyatos produced at least 2.6 million tonnes of massive sulphide ore containing an average grade of 5 g/t gold and 1.2% copper. The gold grade is unusual and the highest of all the deposits within the IPB.
KDL was awarded an Investigation Permit over Lomero-Poyatos in October 2014 following a competitive tender held by the Government of Andalusia.
FARM-IN AND JIONT VENTURE AGREEMENT WITH WINMAR RESOURCES
In August 2016, KDL entered into a farm in and joint venture arrangement with ASX listed Winmar Resources Limited (Winmar) in relation to the Lomero project on the following key terms:
• On execution of the JVA and payment of a condition precedent payment of AUD$200,000, Winmar has a right to earn up to a 70% interest in the tenements over a 3 year period, starting 13 May 2016.
• Winmar must acquire an initial 10% by spending €400,000 in Year 1 (First Commitment).
• Winmar may then elect to acquire a further 35% interest (for a total 45% interest) by spending €3 million in Year 2.
• Winmar may then elect to acquire a further 25% interest (for a total 70% interest) by spending a further €2 million in Year 3.
• Winmar may withdraw at any time after the First Commitment has been completed. If Winmar withdraws during Years 2 or 3, its interest earned to date will revert back to KDL.
The arrangement with Winmar will meet the expenditure requirements for the Lomero project for the initial three years. KDL will retain a 30% interest in the project after this time, thereby providing its shareholders with continued exposure to the project and to copper-gold markets.
as at 31 December 2015
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