Herencia buys Pastizal copper project in Chile

Herencia Resources has signed a binding term sheet to acquire the advanced Pastizal copper project in central Chile via an option agreement.

The AIM-listed mineral and exploration company said it has executed a right to buy 100% if the Pastizal tenement, which is located immediately adjacent to its Picachos project.

Herencia said it has preserved its cash position by negotiating an option agreement that will only require minimum option payments in the first 12 months.

The company will pay no fees upfront, $50,000 after six months and £$160,000 after a year. After two years, it will pay $250,000, followed by a further $400,000 after three years.

It said the copper project has very similar mineralisation to Picachos, with excellent tonnage and high-grade potential, as well as proven operating history.

Herencia said the acquisition is a strategic investment in that Pastizal is potentially a high-grade source of open-pit ore targeted to supplement its production profile and which should provide operating flexibility and optionality.

Managing director Graeme Sloane said: “We believe this is a significant step in the company's transitioning into the producer ranks in the very near term. It has taken some time to achieve this acquisition which is seen as critical from a commercial and strategic position.

“This acquisition is another part of the overall plan that is targeting Herencia becoming a mid-tier mine operator and copper producer in the context of the Chilean mining scene.”

At 1135 GMT, Herencia shares were up 55% at 0.09p.