Errawarra Resources has entered into binding agreements with Alien Metals to acquire a 70% interest in the Elizabeth Hill silver project in Pilbara, Western Australia.
The acquisition also includes 70% of the silver rights to the Pinderi Hills project tenement package. The total tenement package comprising 180km² is in a Tier 1 mining jurisdiction.
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The terms of the acquisition include a A$500,000 cash payment and the issuance of 44.5 million shares to Alien Metals.
Conditions precedent to the transaction include due diligence, a minimum capital raising of A$2.5m and shareholder approvals.
Alien Metals will also be subject to a holding lock on the consideration shares for six to 12 months.
Additionally, Errawarra has signed a joint venture (JV) agreement with GreenTech Metals to acquire 70% ownership of two tenements and one tenement application around the silver project.
The consideration for this transaction is A$100,000 in cash. Errawarra will free carry GreenTech’s JV interest until a decision to mine is announced.
The Elizabeth Hill silver project, previously producing 1.2 million ounces (moz) of silver from 16,830 tonnes of ore, is known for its high-grade silver mineralisation. The historical production ceased in 2000 due to low silver prices but left untapped potential and limited exploration drilling.
Errawarra Resources has outlined a multifaceted strategy to advance the Elizabeth Hill project. This includes geological modelling, targeting, resource assessment and exploration drilling.
Errawarra has secured commitments to raise approximately A$3m through a share placement, with acting lead manager CPS Capital Group funding the project and other initiatives. The placement will issue more than 111 million shares at $0.027 each, representing a slight discount to the company’s volume-weighted average price.
The company aims to accelerate exploration, with fieldwork starting in one to two weeks and drilling beginning six to eight weeks post-acquisition.
It has engaged ERM Consultants for technical and project management support, with fieldwork expected to commence shortly after the acquisition’s completion.
Errawarra Resources chairman Thomas Reddicliffe said: “This is an exceptional opportunity for our shareholders, and we are fortunate to have secured an interest in the Elizabeth Hill silver project and extensions. This will enhance our existing exploration projects in the same region of Western Australia with the addition of an interest in a high-grade past-producing silver asset with growth potential not previously tested.
“The combination of existing high-grade silver intercepts signify growth potential and compelling exploration prospectivity at both near mine and regional targets. With Elizabeth Hill being located on an approved mining lease, this presents an opportunity for the company to fast-track drilling and, if successful, mining supported by a buoyant silver market driven by strong investor demand and global issues.”
In April 2024, Errawarra Resources formed a JV with Alien Metals, focusing on advancing lithium exploration activities at the Pinderi Hills project in West Pilbara.
