Strategic Energy bags Isa North copper-gold project from Newcrest for zero downpayment
Strategic Energy Resources (ASX:SER) has just announced an exciting agreement to acquire the “Isa North” Copper-Gold project in northwest Queensland from mining giant Newcrest (ASX:NCM) – for a zero downpayment.
The favourable terms to SER gives Newcrest retention of first right of refusal, as well as 1% of NSR (net-smelter return).
The deal seems to be a strategic play for SER, given that Isa North project is adjacent to a joint venture between Red Metals and Oz Minerals.
Several large deposits have also been identified to lie on or adjacent to the Gunpowder Fault Zone, near which this project area is located.
The project comprises three exploration licences, covering a 976km2 belt which is under-explored, and considered highly prospective for iron oxide copper-gold (IOCG) mineralisation.
The deal also comes in anticipation of copper-focused drilling, a market which is currently booming.
“The Isa North project was identified during a broader review of the Mt Isa Mineral Province undertaken by Strategic in our search for the next major copper-gold discovery,” said Stuart Rechner, executive chairman of SER, who has been on COVID lockdown and negotiated the entire deal remotely.
SER is well-funded to take advantage of this opportunity.
In January, the company tapped investors for an initial $1.5-2 million capital raise, which was heavily oversubscribed and subsequently gave the company $2.26 million in fresh funds.
The capital raise was, in perspective, extremely successful, given the current soft gold market. Among the investors were SER’s own directors.
According to Ben Williamson, CEO of Fresh Equities who led SER’s capital raising, the Isa North project is well-suited for small miners like SER.
“This is a perfect example of small nimble miners being able to give potentially large projects the attention and focus they need in the early stages to prove up.”
“Something like Isa North has the potential for a large discovery, but at the same time needs more focused and nuanced work than some large miners can justify spending,” added Williamson.
He also praised CEO Rechner for being able to secure such a favourable term for SER.
“Stuart has done an amazing deal here, giving SER shareholders large potential upside for no money down, and has secured a potential joint venture partner in the future if drilling goes well too,” Williamson said.
SER is a $10 million market cap company, and its share price has risen 25 per cent in the past 12 months.