Highlights

• Raiden has entered into an agreement with Velocity Minerals for the Kalabak project in Bulgaria.
• Under the agreement, Velocity can earn up to 75% interest in the project by achieving agreed milestones.
• This transaction will allow Raiden to focus on its Australian Pilbara portfolio of projects.
• Negotiations continue with regard to sale and partnerships on other non-core assets.

Australian company Raiden Resources Limited (ASX: RDN, DAX: YM4) has executed a binding letter agreement with Velocity Minerals for its Kalabak project in Bulgaria.

As per the terms of the letter agreement, Velocity can acquire up to 75% interest in the Kalabak project by achieving certain milestones and completing the agreed drilling commitment.

Data source: Company update

If a joint venture is formed between the parties, then Velocity will operate and manage the exploration program.

With this development, Raiden will be able to focus on its Australian Pilbara projects, wherein the aim is to advance the Mt Sholl deposit and assess the lithium potential of the projects located in the Pilbara region.

Shares jump over 9%

Triggered by the update, Raiden’s share price increased by over 9% to trade at AU$0.012 apiece at the time of writing on 9 August 2023. 

Key terms of the agreement

Raiden and Velocity agreed to negotiate the delivery of a definitive property option agreement within a year after the execution of the letter agreement, informed Raiden.

For the delivery of the letter agreement, Velocity has to complete the following activities –

If Velocity exercises the option, a joint venture will be formed between the parties. If the terms of the agreement are not met, then 100% interest in the project will be retained by Raiden.

Upon the execution of the agreement, Raiden will have the option to co-finance its part of further expenditure to maintain its position.

Raiden highlighted that if any party dilutes its interest in the joint venture below 15%, then interest will get converted into a 1% NSR and the majority party will get the right (not obligation) to buy 0.5% of the royalty for CA$1.5 million.

Prospectivity of the Kalabak project

The Kalabak project is situated in the Haskovo province of southern Bulgaria. Geologically, the project lies within the Tertiary Western Tethyan orogenic belt.

Raiden informed that limited exploration has been done in the project area. The recent discoveries in the same belt outside Bulgaria indicates that the project is prospective for epithermal gold and copper porphyry mineralisation.

Two gold deposits within 10km of the project and with similar geological environments recently reported gold discoveries. This further points towards the prospectivity of the project.

Negotiations are also underway with regard to sale and partnerships on other non-core assets. Meanwhile, Raiden is advancing the evaluation of lithium potential over its Mt Sholl and Roebourne projects.