Mandrake Resources Ltd (ASX: MAN) shares are soaring after the gold miner announced it has bought a high-grade copper mine.
At the time of writing, the Mandrake Resources share price is up 42.55% to 6.7 cents.
This is the news that ASX investors have been waiting for after the company requested a trading halt on Wednesday.
In a statement released just after the market opened today, Mandrake described the buy as a "transformational acquisition".
The junior explorer has executed a binding term sheet to acquire 100% of the Delfin Copper Project in Chile. The mine is located in the world's most prolific copper-producing region of Antofagasta.
Mandrake will be in fine company with the Escondida2 copper mine jointly owned by BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) nearby.
This is Mandrake's first acquisition outside Australia. It owns two exploration licences for the Berinka Pine Creek Gold Project in the Northern Territory and the Jimperding PGE-Ni-Cu Project in Western Australia.
Image source: Getty Images
More about the Delfin Copper Project
Mandrake will pay staged and conditional consideration for Delfin. This begins with a $1 million loan to the former owner, Atacamoz Pty Ltd, as well as 80 million shares.
The deal is conditional upon the successful completion of a 12-week due diligence phase and regulatory approvals.
The exploration project comprises 84 square kilometres of land with existing infrastructure and year-round accessibility for exploration.
Mandrake notes "multiple spectacular historical drilling intersections … at shallow depths". It intends to begin an active exploration program early in the second quarter of 2022.
Mandrake said 90% of historical drilling was contained to just a 300m x 100m area.
The first priority for Mandrake is to get a better understanding of the mineralisation of near-surface high-grade targets. The company says it is cashed up with $16.2 million available to help fund its exploration activities at Delfin.
Management commentary
Mandrake Resources managing director James Allchurch said:
Mandrake is excited to have secured the Delfin Project, which provides the company with an advanced high-grade copper project in a first-class mining jurisdiction.
Historic exploration has identified several different zones of spectacular high-grade copper mineralisation including 86m at 4.83% Cu from 121m in DD-04.
We see a clear opportunity to apply modern exploration and interpretation techniques to understand these zones and look to grow them ahead of a maiden JORC resource.
Mandrake Resources share price snapshot
The Mandrake Resources share price is down 58% over the past 12 months. In the year to date, it has risen by 34%.
The ASX gold company has a market capitalisation of $22.65 million based on the current share price.
