Canada-based exploration firm Tethyan Resource has agreed to acquire the past-producing Kizevak and Sastavci silver-zinc-lead mines in southwestern Serbia.
Located in the Raska district, the two exploration licences are wholly-owned by Serbian company EFPP.
Terms of the agreement between Tethyan and EFPP
The acquisition of EFPP will take place in two steps, an initial first closing whereby Tethyan will acquire 10% of the shares of EFPP and management control of the company for a cash payment of €625,000.
Under the agreement, in a second closing in the 12-month period following the ‘first closing’ when Tethyan has the right to acquire the remaining 90% of the shares of EFPP by paying €1.37m granting the sellers a 2% net smelter return over the licenses; issuing four million ordinary shares of Tethyan in installments; and paying a deferred cash payment of €500,000 on the two-year anniversary of the first closing.
Tethyan president and CEO Fabian Baker said: “This acquisition is a key step in Tethyan’s strategy to consolidate a district of historical mines and exploration prospects in Serbia.
“The Kizevak project in particular gives Tethyan an immediate drill ready target, and we can now drill the 1.2 kilometres of strike length, reported to host historical resources, between the former open pit mine and Tethyan’s excellent 2018 drilling results.”
The completion of the deal is subject to satisfactory due diligence and TSX acceptance on or before 15 April 2020.
Kizevak is reported to host considerable historic mineral resources, along-strike from which Tethyan drilled mineralisation including 12 metres at 22.03% zinc, 10.29 % lead, 167 g/t silver and 0.18 g/t gold.
The mine was operated as an open pit by the Serbian state between 1984 and 2000, ceasing operations due to conflict in the region.
Sastavci was also mined in the past as an open pit on a smaller scale than at Kizevak and represents a priority drilling target.
Tethyan stated that its team collected 65 rock-chip samples across the Sastavci area, which returned assays ranging from trace to >30 % zinc, 7.1 % lead, 94.3 g/t silver and 0.47 g/t gold.
