Arras Minerals (TSXV: ARK) announced on Thursday that it has formed a strategic alliance with Canada’s largest diversified miner and shareholder Teck Resources (TSX: TECK.A, TECK.B) to explore for critical minerals within Arras’ land package in Pavlodar, Kazakhstan.
As part of an agreement, Teck will solely fund generative exploration work through 2025 with initial expenditures of $5 million before year-end 2025 across two land packages totalling approximately 1,736 sq. km.
Arras will act as manager for the initial year of the two-year generative program, with Teck holding the option to assume the role of manager thereafter.
Following the initial generative exploration phase, Teck will have the option to select up to four designated properties totalling 120 sq. km., where Teck will fund exploration expenditures of up to $47.5 million per project to have the right to earn up to a 75% interest in each.
Teck will also reimburse Arras for certain project-related expenses made to date through a $1 million cash payment on signing, and potentially other payments in the future should Teck elect to advance through future phases.
Teck made its first investment into Arras last November by acquiring a 9.9% stake through a private placement to fund exploration activities at its flagship Beskauga copper-gold project, which is held under an option agreement signed in 2020 with Copperbelt AG, a private Swiss-based group.
Located 300 kilometres from the capital Astana, Beskauga is interpreted to represent a classic copper-gold porphyry deposit with indicated resources of 111.2 million tonnes grading 0.30% copper and 0.49 g/t gold and inferred resources of 92.6 million tonnes grading 0.24% copper and 0.50 g/t gold.
Arras also holds several regional exploration licences covering a total of 3,300 sq. km in northern Kazakhstan. These assets (including Beskauga) do not fall under the critical minerals alliance, though Teck will have a right of first offer over the Elemes and Aimandai licences.
“As an early-mover into Kazakhstan two and a half years ago, following the substantial reforms to the business environment and mining law, Arras has assembled the third-largest land package in the country next to Rio Tinto and Fortescue and is specifically focused on copper in the highly prospective Bozshakol-Chingiz magmatic arc,” CEO Tim Barry said in a news release.
Barry also noted that the company recently completed its second summer field season across the regional licence package and is now analyzing more than 50,000 soil samples collected across the approximately 3,300 sq. km. This program was based on the successful 2022 field program where more than 16,000 soil samples identified new targets to follow up, the company said.
“We believe that the exploration work we have undertaken over the past two summer field seasons representing, in most cases, the first material modern exploration work done across these licences since pre-1990, have delineated substantial prospects for a material copper discovery, akin to the successful operations of the Bozshakol and Nurkazgan mines located within the same geological belt,” Barry added.
Shares of Arras Minerals were up 6.7% by 12:25 p.m. in Toronto on the Teck alliance announcement, giving the company a market capitalization of C$16.1 million ($11.8m).