News: Merah Resources to acquire rights to Canadian copper project

Merah Resources (ASX: MEH) has entered into a binding term sheet with Oresearch Limited, an unlisted Australian company, to acquire 100% of the issued capital of Oresearch.

By acquiring Oresearch, Merah will acquire a pipeline of assets under review.

Via Oresearch, Merah has also entered into a farm-in joint venture agreement with Pacific Ridge Exploration, to earn up to an 80% interest in the Fyre Lake copper property, located in the Yukon in Canada.

The total consideration payable to the shareholders of Oresearch is up to $600,000 of Merah shares, split into 3 equal tranches, based around the delivery of set milestones.

The first tranche is payable upon settlement of the acquisition; the second tranche split on completion of capital raisings; and the third tranche upon a twelve month project exploration milestone.

The Fyre Lake Property is comprised of over 150 mineral exploration licences and contains the Kona Mineral Resource, which is classified as a Volcanogenic Hosted Massive Sulphide deposit and over 9 kilometres of favourable host rocks.

The district also hosts the Kudz ze Kayah and Wolverine VMS deposits. The Wolverine deposit, owned by Yukon Zinc, occurs 25 kilometres from Fyre Lake, and reached full commercial production of 650,000 tonnes of zinc per annum in the first quarter of 2013.

The Kona Mineral Resource comprises 8.93 Mt at 1.52% copper, 0.09% cobalt and 0.56 g/t gold, and metallurgical studies indicate metal recoveries of 90% for copper and 70% for gold and cobalt.

No drilling has been conducted on the Fyre Lake Property since 1997, despite the Kona Mineral Resource being open and exploration targets remaining untested.

Merah will also undertake a capital raising by way of a placement of 4,100,000 shares at $0.03, and an entitlement issue at the same price to raise up to $780,000.

In addition, Oresearch is in discussions to acquire a copper asset in Australia. If negotiations prove successful, Merah will also acquire an interest in this copper asset, via its interest in Oresearch.