Celsius Resources Share Price up on Copper-Gold Acquisition (ASX:CLA)
The Celsius Resources Ltd [ASX:CLA] share price is up by a third today as the explorer announced the acquisition of a suite of copper-gold projects.
CLA shares entered a trading halt on Monday pending the acquisition.
Re-entering trade today, the CLA share price is up 34.78% to trade at 3.1 cents per share at time of writing.
An acquisition within an acquisition
CLA announced this morning it will acquire 100% of UK Company Anleck Limited.
Anleck owns, through various subsidiaries, a host of copper-gold projects in the Philippines.
Namely, its flagship project the Maalinao-Caigutan-Biyog Copper Gold Project (MCB project), which contains a large, high-grade copper-gold porphyry deposit.
Exploration at MCB commenced in 2006.
Between December 2006 and 2013 a total of approximately $14.5 million was spent on exploration.
Highlights from historical drilling at the MCB project include:
- 384m at 1.25% copper and 0.46 grams of gold per tonne (g/t), within 767m at 0.77% copper and 0.27 g/t gold
- 177m at 1.98% copper and 0.95 g/t gold, within 630.50m at 0.81% copper and 0.32 g/t gold
- 85m at 1.84% copper and 0.86 g/t gold, within 612m at 0.82% copper and 0.31 g/t gold
The MCB project is located in the province of Kalinga, Northern Luzon, Philippines.
Source: Celsius Resources
As part of the acquisition agreement, CLA will issue 100 million fully paid ordinary shares to the shareholders in Anleck.
Though half of these shares will be subject to a buy-back and cancellation.
A further 100 million shares may be issued to Anleck if the MCB project receives assistance from the Philippines government within 36 months of settlement.
And if CLA’s definitive feasibility study deems the MCB project economically viable.
Provided that this also occurs within 36 months of settlement.
But that’s not all.
Anleck owns a number of other copper-gold projects through its acquisition of Makilala Holding Limited (MHL).
By virtue of Celsius acquiring Anleck, Celsius will effectively assume the MHL acquisition agreement.
Meaning CLA will have to pay a total of up to US$3 million in cash, which is adherent to a number of project related milestones.
Is it all worth it?
There’s no denying the stellar run both gold and copper have had recently.
CLA said a maiden JORC compliant mineral resource estimate is in progress for MCB.
This is expected to be reported once the Philippine COVID quarantine restrictions allow access to the site.
Once this is completed a preliminary technical and economic study will commence.
Meaning the MCB project could soon be entering the development stage (12–24 months).
However, keep in mind that appropriate infrastructure in developing nations like the Philippines is often lacking.
Which can hinder the development of the project.
CLA is not lacking Australia-focused gold projects, with steady progress being made at their tenements in NSW. Our resident gold expert Shae Russell is tipping Australia to become the new gold epicentre. Meaning we could knock China off the top spot. In her free report, Shae details why this could mean big spikes for Aussie gold stocks and what to look out for. If you’re interested, get your free copy here.
For The Daily Reckoning Australia