GreenX Metals Expands Portfolio with German Copper Project Acquisition
GRX (GRX) Share Update August 2024 Thursday 1st
GreenX Metals to Acquire Major Copper Project in Germany
GreenX Metals Limited has announced a significant expansion of its exploration portfolio with the acquisition of a 90% interest in the Tannenberg exploration license in central Germany, a region known for its historical copper and silver mines.
Instant Summary:
- GreenX Metals to earn a 90% interest in Group 11 Exploration GmbH.
- Tannenberg exploration license covers 272 km² in Hesse, Germany.
- Historical Richelsdorf mines produced 416,500 tons of copper and 33.7 million ounces of silver.
- High potential for new discoveries of shallow, large-scale, high-grade Kupferschiefer style copper and silver mineralization.
- Germany and EU's recent policies support strategic raw material projects like Tannenberg.
Project Overview
The Tannenberg exploration license spans 272 km² in the State of Hesse, central Germany, encompassing the historical Richelsdorf copper-silver mines. These mines, which ceased operations in the 1950s, produced 416,500 tons of copper and 33.7 million ounces of silver from Kupferschiefer type deposits.
The project area includes multiple drill intercepts over the high-priority 14 km-long Richelsdorf Dome target, with notable results such as 2.1 meters at 2.7% Cu and 48g/t Ag from 365.48 meters, and 1.5 meters at 3.7% Cu and 33g/t Ag from 209.50 meters.
Strategic Importance
Kupferschiefer style deposits are a prolific subtype of sediment-hosted copper deposits, being the second most prevalent source of copper production globally. These deposits have been historically mined in Germany and are still actively mined in Poland, where KGHM produced 592 kt of electrolytic copper in 2023.
Germany's recent designation of copper as a Strategic Raw Material under the EU's Critical Raw Material Act highlights the importance of projects like Tannenberg. This act, effective from May 2024, aims to strengthen the EU's supply of critical raw materials by facilitating access to financing, expedited permitting processes, and matchmaking with off-takers.
Exploration Potential
The Tannenberg project offers excellent potential for new discoveries of shallow (50-500 meters), large-scale, high-grade Kupferschiefer style copper and silver mineralization. Much of the license area remains untested by modern exploration techniques, which will target thicker sections of footwall and hanging wall mineralization.
Modern understanding of Kupferschiefer mineralization, derived from prolific mining in Poland, places new emphasis on hanging wall and footwall mineralization, structural controls, and metal zonation. For example, at KGHM's Rudna Mine in Poland, 80% of the total copper resource is hosted in footwall sandstone, 15% in hanging wall limestone, and only 5% in Kupferschiefer shale.
Terms of the Agreement
GreenX has entered into an Earn-in Agreement to earn a 90% interest in Group 11 Exploration GmbH. Key terms include the issuance of 500,000 fully paid ordinary shares upfront and funding a Work Program up to EUR 500,000 by 31 December 2025. Once the Minimum Commitment is met, GreenX can acquire 90% of Group 11's share capital by paying A$3,000,000 in shares.
The vendor's 10% interest will be free carried until the completion of a feasibility study, and the vendor may exchange their remaining interest for a 0.5% Net Smelter Royalty.
The acquisition of the Tannenberg project significantly enhances GreenX Metals' exploration portfolio, providing exposure to strategic raw materials crucial for European industry and decarbonization efforts. The project aligns with recent EU and German policies aimed at securing a stable supply of critical raw materials, potentially leading to expedited permitting and access to development funding.
Investor Reaction:
Analysts are likely to react positively to the acquisition, given the project's potential for high-grade copper and silver deposits and its strategic location in the heart of German industry. The alignment with EU and German policies further strengthens the project's prospects, making it an attractive addition to GreenX Metals' portfolio.
Conclusion:
Investors should closely monitor GreenX Metals' progress with the Tannenberg project, as it represents a significant opportunity to capitalize on the growing demand for strategic raw materials in Europe. The company's strategic response and exploration activities will be crucial in realizing the project's full potential.