Australian mineral exploration and development company Altamin has executed a binding term sheet with Appian Natural Resources Fund II for the development of the Gorno Zinc project.
Under the terms of the agreement, the two parties will establish a joint venture (JV) entity to operate and fund the development of the Gorno Zinc project, subject to certain conditions.
Appian will earn up to a 67.4% interest in Gorno, by investing up to A$94m ($65m), paid in two tranches.
The first tranche of A$14.5m ($10m) will fund the expanded exploration and infill drilling, and a definitive feasibility study, in exchange for a near 29.9% interest in the project.
The second tranche of around A$79.6m ($55m) will fund the project construction following a final investment decision (FID), in exchange for an additional 37.5% stake in the project.
Altamin managing director Geraint Harris said: “This funding enables our work program to be significantly expanded to test the significant near mine exploration potential and expand the resource footprint at Gorno, therefore maximising project and shareholder value, whilst significantly reducing equity dilution and finance risk for our shareholders.
“Altamin and Appian are aligned on this strategy and the partnership with Appian also brings a wealth of new exploration and mine development experience to our team.
“Attracting a world-class partner such as Appian to invest in one of Altamin’s projects is testament to the hard work of the Altamin team and the quality of the Gorno Project, while also highlighting Italy as a Tier 1 jurisdiction for mining investment.”
Altamin and Appian will jointly manage Gorno and Altamin is expected to retain a 32.6% interest in Gorno once the project has been funded to commercial production based on the Scoping Study criteria.
The company is expected to maintain complete ownership and development control of its other base and battery metal projects in Italy.
Altamin said that the execution of the term sheet concludes its strategic process to assess various options for the development of the project, as announced on 24 November last year.
The process includes activities to enhance the project value, reduce the financing risk and establish an expanded development pathway for the Gorno project, said the mineral exploration company.
Appian founder and CEO Michael W Scherb said: “Appian is excited to partner with Altamin on the development of Gorno, a high-quality asset with a highly prospective resource and strong local support, to realise the full potential of this project and deliver value to all stakeholders.
“The work of the Altamin team to date is a credit to themselves, and we look forward to working with them, the surrounding communities, and all other stakeholders to successfully advance the project.”
