Canadian-based mining company Dundee Precious Metals (DPM) has signed a binding letter agreement to acquire a 75% interest in the Iglika copper-gold prospecting licence in Bulgaria from gold exploration and development company Velocity Minerals.

Under the agreement, DPM will have the exclusive option to acquire a 75% interest in the Iglika licence by making an initial cash payment of $250,000 (C$333.94m) to Velocity and funding the 40,000m drilling work on the property.

DPM is required to make the cash payment to Velocity within five business days from the signing of the letter agreement, while 10,000m of drilling must be completed prior to the first anniversary of the effective date.

The company will also fund and deliver a mineral resource estimate on a deposit located within the property; fund and deliver the deposit’s pre-feasibility study; and make an additional $1.5m cash payment to Velocity during a five-year period.

In a press statement, Velocity Minerals said: “DPM will be under no obligation to fulfil any of the remaining earn-in requirements and may accelerate the satisfaction of the earn-in requirements without penalty, at its election.”

DPM has started a drilling programme at the Iglika licence to test copper–gold porphyry, skarn and epithermal targets defined by geochemical and geophysical anomalies. The programme comprises 24 drill holes for 10,000m. 

The Canadian company plans to complete detailed mapping, soil sampling and geophysical surveys to further refine drill targets at the property.