Initiation of Farm-Out Process for Verkhuba

East Star Resources PLC
03 April 2024
 

3 April 2024

East Star Resources Plc

("East Star" or the "Company")

Initiation of Farm-Out Process for Verkhuba

 

East Star Resources Plc (LSE:EST), the Kazakhstan focused copper exploration and resource development company, is pleased to announce that, as a consequence of interest in the Verkhuba copper deposit ("Verkhuba" or the "Copper Deposit") having been received from several companies, the Company has initiated a formal process including the opening of a data room for a potential joint venture, farm-out, or sale of the Copper Deposit ("Transaction").

 

Highlights:

·   

Several parties, including mid-tier mining companies, have been provided access to the data room

·   

One non-binding offer has been received to date

·   

Process expected to be finalised in June, in time for drilling to commence in the forthcoming field season

 

The process is expected to take several months and will run in parallel with continued preparation for the upcoming field season, beginning with the publication of a maiden JORC Inferred resource. The work programme is anticipated to include drilling, targeting a conversion of the main open pit area to a JORC Indicated resource, further testing the continuity of the primary underground ore bodies, and drilling several exciting geophysical targets in other areas of the licences on the Rudny Altai Volcanogenic Massive Sulphide ("VMS") belt.

Alex Walker, CEO, commented:

"East Star believes the value of Verkhuba alone significantly exceeds the current market capitalisation of the Company and as such will only consider proposals that offer a fair valuation for shareholders and exposure to the near-term production potential of the Copper Deposit at a time when a multiyear copper bull market is being predicted by most market analysts.

 

The open pit and underground potential of Verkhuba have been demonstrated by the modelling of more than 46,000 meters of drilling and numerous geological interpretations by independent resource consultants. There is around 1.4 million tonnes per annum of excess processing capacity from two third-party concentrators within 52km by road of the Copper Deposit. With power and water easily accessible on site, the opportunity for Verkhuba to be put into production quickly and with a low upfront capital cost is compelling and reflected in the interest received to date.  

 

We look forward to undertaking this process while planning continues for the field season, including advancing a number of exciting VMS targets in the licence package towards drilling, and progressing our porphyry and sediment-hosted copper exploration strategies."

 

There can be no certainty that a Transaction will be concluded; however, given the significant processing infrastructure in the region, the Company is confident of receiving multiple commercial offers.

 

East Star Resources Plc

Alex Walker, Chief Executive Officer

Tel: +44 (0)20 7390 0234 (via Vigo Consulting)

 

SI Capital (Corporate Broker)

Nick Emerson

Tel: +44 (0)1483 413 500

 

Peterhouse Capital Limited (Corporate Broker)

Peter Greensmith

Tel: +44 (0) 20 7469 0930

 

Vigo Consulting (Investor Relations)

Ben Simons / Peter Jacob

Tel: +44 (0)20 7390 0234

 

About East Star Resources Plc

 

East Star Resources is focused on the discovery and development of strategic minerals required for the energy revolution. With eight licences covering >1,000 km² in three mineral rich districts of Kazakhstan, East Star is undertaking an intensive exploration programme, applying modern geophysics to discover minerals in levels that were not previously explored. East Star's most advanced project is a copper deposit on the world-class Rudny Altai VMS Belt where the Company is working towards the delivery of a JORC compliant open pit copper resource close to infrastructure, within trucking distance of third-party mills with excess capacity. East Star's management are based permanently on the ground, supported by local expertise, a joint venture with the state mining company on certain projects, and grant funding from BHP through the BHP Xplor programme for copper porphyry exploration.

 

Visit our website:

www.eaststarplc.com

 

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The person who arranged for the release of this announcement was Alex Walker, CEO of the Company.

 

This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) Regulations (SI 2019/310) ("UK MAR"). Upon the publication of this announcement, this inside information (as defined in UK MAR) is now considered to be in the public domain.

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