East Star Resources Plc eyes partnership for Verkhuba Copper deposit

LONDON: East Star Resources Plc (LSE: EST), is exploring strategic options for its Verkhuba copper deposit in Kazakhstan. The company has opened a data room to facilitate a potential joint venture, farm-out, or outright sale of the deposit, following interest from various entities.

Key Points:

• Access to the data room has been granted to several interested parties, including mid-tier mining companies.
• One non-binding proposal has been received thus far.
• The transaction process is slated for completion by June, aligning with the start of the drilling season.

In parallel with the transaction process, East Star Resources is gearing up for the field season, which includes publishing a maiden JORC Inferred resource and a work programme aimed at upgrading the main open pit area to a JORC Indicated resource. The company will also test the continuity of the primary underground ore bodies and drill additional geophysical targets within the Rudny Altai 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.

Getech and East Star Resources join forces to explore copper in Kazakhstan