Hannans Reward sells Swedish prospect for $4m

Hannans Reward has reached agreement to sell the Discovery Zone copper-iron prospect in Sweden to Avalon Minerals for $4 million.

Avalon will pay Hannans $3 million in cash for the prospect, and holds the option for the final million to be paid in either shares or cash.

Hannans said the funds raised from the sale would be used to advance development at its Kiruna iron project in Sweden and its copper-gold portfolio in Scandinavia.

“The sale of this non-core asset will provide Hannans with additional funds to advance its Kiruna iron project and in particular complete a scoping study on the Rakkurijoki deposit,” Hannans managing director Damian Hicks said.

“In addition to the Discovery Zone prospect, Hannans has an extensive portfolio of valuable copper, gold and nickel prospects.”

Avalon managing director Jeremy Read said the acquisition was an exciting opportunity to expand the company’s portfolio, in close proximity to its Viscaria copper project.

“The location of the Discovery Zone Prospect … offers the potential to add up to $100 million in value to Viscaria, bringing the total project NPV to potentially $US300 million, by trucking mineralisation from Discovery over to the planned processing plant at Viscaria, extending the life of the overall project to 9.5 years and allowing an increase in the mining rate,” Mr Read said.

The acquisition remains subject to legal and technical due diligence.

At 12:50PM, WST, Hannans Reward’s stock was down 12 per cent, at 2.2 cents, while Avalon shares were down 5.5 per cent, at 8.5 cents.