S2 To Retain 100% Of Key Nickel-Copper Ground
S2 Resources Ltd’s (ASX:S2R) wholly-owned Finnish subsidiary Sakumpu Exploration Oy has entered into a binding farm-in agreement with North American major gold producer Kinross Gold Corporation on licenses in northern Finland.
The deal covers four exploration licences and licence applications covering an area of 83 square kilometres in the Central Lapland Greenstone Belt (CLGB) in northern Finland.
Under the Agreement, Kinross can spend up to US$9.5 million to earn a 70% interest in these licences, with a minimum expenditure requirement of US$3.5 million over the first three years.
S2 retains 100% ownership of the licences covering its key Aarnivalkea gold and Ruopas nickel-copper targets, which will be the focus of its near-term exploration.
S2’s CEO, Matthew Keane, said various strategic options are being considered for the balance of the company’s large ground position (159 sq. km) in this emerging gold province, which contains the 7.4 million ounce Kittila gold mine owned by Agnico Eagle and the outstanding new Ikkari gold discovery owned by Canadian junior Rupert Resources.
“We are delighted to be partnering with a respected major gold producer such as Kinross, a company with a strong operating and exploration track record driven by its technical excellence and safety,” Mr Keane said.
“This transaction will expedite exploration on a group of highly prospective licences, whilst allowing S2 to focus its funds on advancing the Aarni’ and Ruopas targets.
“Securing prospective tenure in the CLGB is becoming increasingly competitive, particularly with the recent exploration success of Rupert Resources (RUP.V) and Aurion Resources (AU.V). As such, we see this Agreement as a win-win outcome for both companies and we look forward to working with Kinross.”
Mr Keane said the Agreement satisfies several of S2’s strategic objectives, namely:
- It allows S2 to retain 100% ownership of and focus its funds on core assets, in particular the Aarni’ gold prospect and Ruopas Isovaara nickel-copper target
- It expedites exploration on other earlier stage, but highly prospective gold target areas within the Kinross farm-in licences (covering an area of 83 sq. km)
- It decreases the overall fixed cost which S2 would otherwise need to incur to continue to hold a 100% interest in this extensive area
- This significant reduction in non-core fixed ground holding costs enables S2 to optimise the effectiveness of its exploration program by increasing the proportion of in-ground expenditure at Aarni’ and Ruopas
- Should Kinross make a discovery under the farm-in, S2 has the option to retain a 30% exposure to this as a joint venture (JV) participant
- It enables S2 to consider various strategic options over a further 159 sq. km of prospective tenure in this emerging gold province
