The board of Connemara Mining Company plc (AIM: CON) have been informed that Group Eleven Resources Corp. (“G11”), a private company, has acquired the 76.56% interest held by Teck Ireland (“Teck”) in TILZ Minerals, the joint venture company, which holds six (6) prospecting licences covering the Stonepark zinc project in Limerick, Ireland, said Connemara Mining. Connemara owns the remaining 23.44%.
G11 is a private Canadian company with extensive base metal licence holdings in Ireland. MAG Silver Corp. and Teck Resources (both listed Canadian companies) hold 22.0% and 6.3% respectively of the equity on a fully diluted basis. G11 have announced that they are preparing to list publicly in Canada later in 2017.
The Stonepark property covers an area of 183.5 square kilometres and hosts three main pods of known mineralization (Stonepark North, Stonepark and Stonepark West), located approximately 2 to 4 kilometres west of the Pallas Green zinc deposit. Known mineralisation at the Stonepark Project is generally shallow, approximately 200-300m. Zinc sulphide mineralization at Stonepark North has been continuously intersected by drilling (six holes in total) for over 550m in strike.
The Project also hosts five (5) zinc prospects (Crecora, Rockfield, Rochestown-Fedamore, Rathmore and Limerick South). Each prospect hosts preliminary levels of drilling and at least some zinc mineralization (e.g. 7.5% Zn+Pb over 0.62m at Crecora; 0.29% Zn+Pb over 13.0m at Fedamore; and 0.44% Zn+Pb over 8.0m at Limerick South).
Significant mineralisation was first discovered at Stonepark in late 2007. The remaining five prospects are at a relatively early stage of exploration. The three known pods of mineralisation at Stonepark continue, in G11’s opinion, to be largely open. G11 views Stonepark as an advanced exploration asset and has stated that its primary focus will be to expand known mineralisation on the block.
Consideration for the Acquisition
– C$2,150,000 in cash – Paid
– Net smelter return (NSR) royalty of 4.5% (on 76.56% of production) with buy-back provisions:
- 0.5% for C$2,000,000 – at any time
- 1.0% for C$1,000,000 – on delivery of a preliminary economic assessment (PEA)
- 1.0% for C$1,000,000 – on delivery of a preliminary feasibility study (PFS)
- 1.0% for C$3,000,000 – on delivery of a bankable feasibility study (BFS)
- This would leave Teck with a 1.0% NSR if all buy-back provisions were exercised.
Connemara was offered equivalent terms as above and if Connemara had chosen to sell then the consideration for Connemara’s stake (assuming all buybacks were exercised) would be C$2.80 million and an NSR of 1% on 23.44% of production. Following discussions with G11 the board of Connemara decided to retain its 23.44% interest rather than sell on the same terms as Teck.