This lifted Argonaut's ultimate earnable interest in the project to 88.5%.
The company increased the interest for a US$150,000 payment, and importantly the ownership change has been captured prior to and during any feasibility study.
The move has delivered Argonaut improved and simplified the commercial terms for the joint venture, and highlights the clear indication of the board's view on the significance of the project.
Lindsay Owler, executive director, said that by increasing the ownership rights prior to and during the feasibility study, it allows the company to capture the project's full potential value.
"Our drilling activities to date and the subsequent positive feedback on the project's technical merits has provided the company with sound reasons for continued optimism.
"We continue to pursue the most effective pathway to uncover additional major deposits at Lumwana West and look forward to updating shareholders on our progress."
The Lumwana West joint venture involves large scale prospecting licence 16121-HQ-LPL.
Under the newly varied terms of the joint venture, Argonaut's wholly-owned subsidiary, Lumwana West Resources Ltd, can earn up to 90% of Mwombezhi Resources Ltd which holds 16121HQ-LPL.
The Mwombezhi Dome is located in the western extension of the Lufilian Arc which is host to the Central African Copperbelt, and is comprised of two northeast-southwest trending basement inliers, and is one of several domes in an area of the Copperbelt known as the 'Domes Region'.
The Domes Region is host to the new generation of Zambian Copperbelt mines including Barrick's (NYSE: ABX) Lumwana copper mine on the eastern lobe of the Mwombezhi Dome as well as First Quantum's (TSE: FM) Kansanshi Mine and Sentinel Project
The joint venture is now in two phases:
- In earning an initial 51%, LWR paid a US$300,000 signing fee and funded US$1.8 million in exploration works prior to 31 December 2012. The company paid US$600,000 to the initial shareholders on the first allotment of shares; and
- To earn a further 39%, for a total of 90%, LWR must spend an additional US$2.4 million on exploration and make a final cash payment of US$1.1 million to the initial shareholders prior to 31 December 2014.
The Lumwana West licence area covers numerous prospects, as defined by regional soil geochemistry. The Nyungu prospect was selected by Argonaut as the first area for intensive investigation.
Exploration target at Nyungu
RPM estimated the Nyungu Exploration Target has the potential to host between 130 to 180Mt at a grade range of 0.45 to 0.65% copper.
Argonaut has made a strategic move with the deal to increase its ownership rights in Lumwana West.
The timing is right as the deal delivers Argonaut increased exposure before, and during, the key Feasibility Study.
Argonaut is therefore well-placed to capture any fuller uplift in value from a positive study.
The news will continue to flow for Argonaut with results expected in the near-term from a regional exploration program, including a major IP geophysics program, surface geochemistry and reverse circulation drilling.
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