January 24 (SeeNews) - Canada's Velocity Minerals said on Tuesday that it plans to start surface exploration and geophysical surveys at the Zlatusha gold and copper project in Bulgaria as soon as possible, after announcing an initial binding agreement to buy up to 75% of the asset from Zelenrok, a Bulgarian unit of Australia's Raiden Resources.
The company aims to begin drill testing in the second quarter of this year focusing on the Zlatusha prospect at first, while assessing six other existing prospects with a view to start drill testing in the third quarter of 2023, Velocity Minerals said in a press release.
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Under the agreement, Velocity Minerals has an option to acquire up to a 51% stake in the property at first, to be followed by an option to buy a further 24%, also taking over the prospecting and exploration licence, the Canadian company said in a press release.
The buyer has agreed to pay 700,000 Canadian dollars ($523,081/481,325 euro) in cash as well as 300,000 Canadian dollars in cash or Velocity common shares. The terms of the transaction also require the Canadian company to complete 40,000 m of drilling, along with earn-in requirements within three years of starting drilling.
Raiden Resources took over Zelenrok, the owner of the rights to the Zlatusha and Kalabak projects as well as the Draka mineral application in Bulgaria, from US Gold Bull Resources Corp in a cash-and-stock deal worth 2 million Australian dollars ($1.4 million/1.3 million euro) in May 2022. Gold Bull Resources currently holds a 2% net smelter royalty on the Zlatusha property, of which 1.5% can be purchased for 7.5 million US dollars (6.9 million euro).
Velocity and Raiden will hold talks to sign a definitive property option agreement, the Canadian miner added.
In Bulgaria, Eastern Europe-focused Velocity Minerals owns a 70% interest in the Tintyava property, which includes the Rozino deposit, a 70% interest in the Momchil property with the Obichnik deposit, a 70% interest in the Nadezhda property which includes the Makedontsi deposit,, a 70% interest in the Dangovo property and a 100% interest in the Iglika property.
(1 Canadian dollar = $ 0.7472/0.6876 euro)