Avalon Minerals has announced it will purchase a copper-iron prospect in Sweden from Hannans Reward for $4 million.
Avalon said today it had signed a heads of agreement with Hannans to acquire the Rakkurijarvi exploration permit and the Discovery Zone exploitation concession, as well as the exploration area surrounding the project in Sweden’s Kiruna district.
After the transaction, Avalon will hold the rights to all minerals at the Discovery and Tributary zone prospects, while Hannans will retain the rights to minerals outside that area.
A sale and purchase agreement is expected to be completed by the end of the month.
The transaction will take place in two tranches, with the first $2 million payment due after written notification from Sweden’s mining inspectorate is received, formally registering Avalon as the holder of the permits.
The second $2 million payment will be made when the Discovery Zone exploitation concession is formally granted to Avalon.
“Both Avalon and Hannans have worked hard over the past few months to agree on terms for Avalon to purchase the Discovery Zone copper-iron deposit, while protecting Hannans’ interests elsewhere within the tenements covering the Discovery Zone,” Avalon managing director Jeremy Read said.
Mr Read said a scoping study completed late last year showed mineralisation similar in nature to Avalon’s existing D-Zone mineral resource, and the exploration tenements could add up to $140 million in value to the company’s Viscaria copper project.
The Discovery Zone prospect is around 10 kilometres away from Viscaria.
At close of trade today, Avalon’s stock was steady at 4.3 cents, while Hannans Reward sahres were also steady at 1.7 cents.
