Last checked at (Sharecast News) - Minerals exploration and development company Alien Metals has signed an exclusivity agreement with Wombat Resources, the owner of the historic tailings on site within the Elizabeth Hill silver project in Western Australia, it announced on Wednesday.
The AIM-traded firm said the 60-day exclusivity period would be used to carry out a further assessment of the tailings in situ, and potentially negotiate an acquisition by Alien of the rights and title to the Elizabeth Hill tailings project, if terms could be agreed.
It said recent sampling of the tailings Alien had undertaken returned "very encouraging" results, after 84 samples were taken from 21 locations, with silver grades up to 1,270 grams per tonne.
The samples returned an average grade of 472 grams of silver per tonne.
Alien's board confirmed that during the exclusivity period, the two parties intended to negotiate an acquisition by Alien of the rights and title to the Elizabeth Hill tailings.
"We have been aware of the potential of historic silver tailings at Elizabeth Hill for some time," said chief executive officer and technical director Bill Brodie Good.
"Knowing that the Elizabeth Hill silver mine's historic operations were somewhat inefficient and being very high-grade with abundant native silver we felt that, despite previous reprocessing activities, there is likely significant value remaining in the silver tailings.
"Following discussions with the silver tailings owner, a first-pass sampling program was undertaken in December to test the properties of the tailings."
Brodie Good said ALS Laboratories in Perth carried out an aqua regia ICP-AES assay on 84 auger samples from 21 locations, which returned consistently high values of silver and associated minerals.
"Over the coming months, the company will undertake further sample work and analysis to better understand the most efficient and cost-effective processes to extract the silver from the tailings.
"We believe that the silver tailings project could generate near-term cash flow which could help underpin a range of exploration activities at Elizabeth Hill and the Munni Munni North project."
At 1045 GMT, shares in Alien Metals were down 4.33% at 1.03p.
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