Royal Road Minerals (TSXV: RYR), a Jersey-based explorer with projects in South America, is expanding to a copper-gold project in Morocco with an option to purchase Izughar Resources for nearly $3.4 million.
The deal is being done through a 50-50 partnership with Saudi Arabian company MSB Holdings, Royal Road said in a release on Tuesday. The partner, which owns units in construction to cybersecurity, is run by Tareq Telemesani, a Saudi real estate developer. He led Jeddah Development & Urban Regeneration, Knowledge Economic City and once worked for state oil company Aramco.
The deal marks another avenue for Saudi Arabia to pivot into green metals following a government strategy begun last decade to invest its petroleum dividends into so-called future minerals. It holds an annual conference on the effort which last January saw the government sign deals with Ivanhoe Electric (TSX: IE; NYSE-AM: IE), Barrick Gold (TSX: ABX; NYSE: GOLD), Eurasian Resources Group, Nokia, Shell and Bechtel.
This joint venture’s focus is the 680-sq.-km Alouana early stage copper-gold project in eastern Morocco. Royal Road’s staggered payments to Izughar depend on hitting certain exploration and development targets. If met, the Moroccan company would retain 10% of the project that would eventually become a 2% net smelter return royalty.
“Morocco has excellent geology for copper deposits and is a mining friendly jurisdiction looking to triple the industry’s turnover by 2025,” Tim Coughlin, Royal Road president and CEO, said in an emailed reply from Saudi Arabia. “Our partners MSB are involved in construction and other projects in Morocco and so naturally it makes sense for us to work together.”
The northwest African country wants to more than double 2020 revenue from non-phosphate mining to greater than $1.7 billion by 2030, according to a government plan. Morocco is the world’s largest phosphate producer.
Shares in Royal Road rose C$0.01 to C$0.10 apiece in Toronto on Tuesday, valuing the company at C$26.4 million. They’ve traded in a 52-week window of C$0.09 to C$0.17.
The joint venture, Royal Road Arabia, plans to spend $150,000 to complete more rock-chip and channel rock-chip sampling as well as ground magnetics and radiometrics with a view to drill in early 2024. The initial focus will be on drill-testing the grade and volume potential, it said.
“Alouana is a very typical thermal aureole copper and gold system formed above and adjacent to a granitic intrusion,” Coughlin said in the release. “This style of deposit hosts some of the world’s largest copper and gold resources and is a target style of key interest.”
Alouana hasn’t been drill-tested, but Izughar collected 92 grab rock-chip samples. They showed copper up to 21% (minimum 0.001% and average 1.3%), gold up to 5.9 grams per tonne (minimum 0.01 and average 0.17 gram per tonne). Silver was found up to 493.8 parts per million (minimum 0.53 and average 22.28 ppm) and tungsten up to 0.36% (minimum 30 ppm and average 365 ppm).
The joint venture has completed soil geochemical sampling and geological mapping across Alouana. A total of 1,718 soil samples were collected across 100-metre spaced lines and on 50-metre intervals. Results mapped out an approximately 2-km-long ridge-top zone, showed the steep dipping mineralized vein, breccia and porphyry bodies, it said.
Alouana, in the Moroccan provinces of Taourirt and Guercif, saw small-scale mining at the beginning of the last century. Some 35 small-scale copper, gold and silver workings have been identified from within the Izughar license areas, Royal Road said.
The company is exploring in Saudi Arabia where it’s submitting license applications for early-stage assets, Coughlin said by email. It’s also in Argentina and Colombia.
The Güintar and Margaritas concessions in Colombia were acquired in 2019 and had been drilled by AngloGold Ashanti (NYSE: AU; JSE: ANG). Royal Road began drilling in 2021. Highlights included drill hole GUI-DD-012, which cut 303.7 metres at 1 gram per tonne gold equivalent and 0.8% copper equivalent including 62 metres at 2.1 grams gold, 12.4 grams silver and 0.62% copper.
“We have many other assets in that country which we are looking to sell for cash and royalties,” Coughlin said. “There are some deals we are working on currently with local partners.”
In Argentina, the company holds the Santo Domingo district in San Juan province, 150 km east of San Juan City, at an altitude of about 1,200 metres. The 250-sq.-km area holds the El Arriero, Divisiora and Alunita copper-gold targets where the company has completed some scout-drilling.
