Estrella pairs with Cliffs in Peru

Geologist Brian Brewer studies copper mineralization at Pampa Poroma.Geologist Brian Brewer studies copper mineralization at Pampa Poroma.

Estrella Gold (EST-V) is partnering with Cliffs Natural Resources (CLF-N) to explore for iron-oxide copper-gold (IOCG) targets in southern Peru.

The pair has struck a two-year agreement under which Cliffs has agreed to fund $400,000 annually towards generating new prospects using Estrella’s regional database. Each new property acquisition will be held by a jointly-owned company on a 50-50 basis.

Cliffs will have the right to acquire an additional 20% in each selected project by spending $4 million and completing 3,000 metres of drilling within four years. It can boost its interest to 80% by completing a National Instrument 43-101 compliant prefeasibility study or by defining a resource containing at least 1 million oz. gold or gold-equivalent oz.

“This is an ideal opportunity for Estrella and Cliffs,” said Keith Laskowski, president of Estrella, in a prepared statement. “Cliffs is an industry leading international mining and natural resources company, with an aggressive program to discover new iron-oxide copper- gold deposits in Peru.

“Our team and our database will provide a quick start and efficient program,” he said.

Under a separate agreement, Cliffs can earn an initial half-interest in Estrella’s wholly-owned Pampa Poroma IOCG property in Peru’s department of Ica, by spending $2 million in exploration over two years.

The project is described as an early-stage exploration target, covering 9 sq. km of prospective claims.

Recent work identified copper and hematite showings on the property, which will be the subject of future exploration. Cliffs will have the option to increase its interest to 80% by meeting certain exploration expenditures and thresholds.

Estrella recently closed a $1-million non-brokered private placement comprising 2 million units priced at 50¢ apiece. Each unit consists of one share and one 2-year warrant, exercisable at 80¢.

With 16 million shares outstanding, Estrella is trading around 84¢ in a 52-week range of 40¢-$2.45.

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