Daewoo Minerals Canada (DMC) has exercised its right to earn an additional 30% interest in Serengeti Resources’ Kwanika Copper Gold project in Canada. 

The move will bring DMC’s aggregate interest to 35% in the project, which is in the Quesnel Trough of north-central British Columbia.

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The increase in stake is subject to finalising and executing the full joint venture (JV) agreement in relation to the project.

Serengeti Resources president and CEO David Moore said: “POSCO Daewoo’s commitment provides financial stability and I believe significant value to both the Kwanika project and Serengeti as a company. 

“Today’s announcement provides a clear path forward that will begin with the initiation of a pre-feasibility in the short-term.”

"Once the deal is complete, Serengeti will continue as project operator, with the right to charge a 10% operator’s fee on expenditures."

The parties will form a JV company over the next two months, in addition to finalising the JV agreement.

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Towards advancing the Kwanika property, DMC will pitch in with its current 5% interest, as well as $7m in cash, while Serengeti will offer an additional 30% interest to the new JV company.

Alongside the completion of pre-feasibility study (PFS), the companies will contribute funding towards a drilling programme set to start in September. 

Once the deal is complete, Serengeti will continue as project operator, with the right to charge a 10% operator’s fee on expenditures.

Under the findings of a preliminary economic assessment, the project was found to have pre-tax and post-tax net present value (NPV) at 7% of C$324m ($259.23) and C$191.2m ($152.97) respectively, with a 21.1% and 16.6% internal rate of return (IRR) and a mine-life of 15 years.