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Freeport McMoRan earns-into 4 Serbian licenses held by Reservoir Capital Corp and EurOmax

Reservoir Capital Corp (TSX-V:REO, FSE:ROC) has agreed to farm-out 4 licenses, totalling 18,395 hectares, in the Bor District of northeast Serbia, in a deal with a Freeport-McMoRan’s (NYSE:FCX) exploration unit. The deal, referred to as the Timok Agreement, sees Freeport earn up to 75% of the properties by taking a project through to the ‘Feasibility’ stage.

To execute the deal, Reservoir has separately acquired 2 of the 4 licenses from EurOmax Resources (TSX-V:EOX) n exchange for a for a 0.5% net smelter return (NSR) royalty. The deal relates to the Durlan Potok and Brestovac East Exploration Licenses.

The Timok agreement covers the Reservoir-owned Brestovac and Jasikovo exploration licenses, as well as Reservoir’s newly acquired Durlan Potok and Brestovac East licenses. All four licenses are being transferred into a subsidiary of Reservoir Capital, Rakita D.o.o. 

Under the terms of the Timok Agreement, Freeport can earn an initial 55% interest in Rakita by investing US$3 million in exploration over a four-year period. During this initial earn-in phase, Reservoir will act as operator for the exploration work being carried out on the license.

Subsequently, once Freeport has earned its initial 55% interest, it can earn up to 75% in the properties, earning a further 20% by reaching certain development milestones. Freeport must complete a Scoping Study within 4 years, a Pre-Feasibility Study within 8 years Feasibility Study within 13 years.

The 25.5km2 Brestovac Exploration License lies 4km south of the world-class Bor copper-gold mining district which has historical production of 7Mt of copper and 300t of gold. According to Frontier, Brestovac hosts favourable geology, alteration and mineralization, with excellent potential for porphyry copper-gold mineralization on the 6km strike-extension of the Bor Fault within the License.

Reservoir’s previous work has outlined a high-grade epithermal copper-gold system in the "Corridor Zone" along a strike length of 550 meters. The best drill intercept for gold, cut 16.90 meters at 13.04 grams per tonne gold. Notably, the last hole drilled by Reservoir, at the eastern end of the Corridor close to the Bor Fault, intercepted a massive sulphide zone with 24.8 meters at 0.33% copper and 0.16 g/t gold. The company said that the intercept supports its theory that the epithermal gold mineralization of the Corridor grades into a copper-rich zone.

The 12.45km2 Jasikovo Exploration License lies to the north of the Bor Mine. The company said that surface work to date, has mapped and sampled several prospective alteration zones that also warrant further work.

Brestovac East covers 90km2 adjacent to both Brestovac and the Bor Copper-Gold Mine, while Durlan Potok covers 56km2 to the north of Bor. According to Euromax, initial wide-spaced soil sampling has defined a 2,000 metre long gold and copper anomaly with peak values of 720 parts per billion (ppb) gold and 620 parts per million (ppm) copper.

In relation to the EurOmax deal, Reservoir noted that Freeport has previously owned both properties, and they have previously undertaken some exploration work, as such the 0.5% NSR royalty will not apply to any portion of the property eventually owned by Freeport.