(Alliance News) - East Star Resources PLC on Wednesday said it had initiated a formal process for a potential joint venture, sale, or farm-out of the Verkhuba copper deposit after receiving interest from several parties.
The Kazakhstan-focused copper exploration and resource development company, which owns 100% of the Verkhuba deposit licence, has already received a non-binding offer and said it is in discussions with a number of potential partners regarding an offload of the asset.
Over the next several months as the company explores all available options, East Star said it will continue with preparations for the upcoming field season and work programme, including drilling and further testing of Verkhuba and its other key Kazakh targets.
Chief Executive Officer Alex Walker said: "East Star believes the value of Verkhuba alone significantly exceeds the current market capitalisation of the company and as such will only consider proposals that offer a fair valuation for shareholders and exposure to the near-term production potential of the copper deposit at a time when a multiyear copper bull market is being predicted by most market analysts."
The potential of Verkhuba has been demonstrated by the modelling of more than 46,000 metres of drilling and numerous geological interpretations by independent consultants. With power and water easily accessible on site, the company is confident production can begin quickly with low upfront capital costs.
East Star shares were up 60% to 2.40 pence each in London on Wednesday afternoon.
By Elijah Dale, Alliance News reporter
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East Star Reso (EST)