This ASX gold miner just bought a copper mine, and its share price is surging 40%

The acquisition has excited ASX investors with more than 55 million shares traded by early afternoon.

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Key points

  • This ASX gold share is having a ripper day with its share price up 40% in early afternoon trading 
  • Mandrake Resources announced this morning that it has bought a high-grade copper mine in Chile 
  • This is the junior explorer's first acquisition outside Australia 

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.

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.

Motley Fool contributor Bronwyn Allen owns BHP shares. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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