Integrated Resources Group (ASX: IRG) should firm in trade today after signing a conditional farm-in agreement to acquire over 3000 square kilometres of copper exploration ground in Zambia.
Up to 39.4% copper and 9.02 grams per tonne gold have been reported in historical trench sampling within the permit area, along with drill results up to 7.3% copper over 3.2 metres.
In what should catch the investor eye, The Kalengwa South project within the tenement package borders a tenement owned by Vale SA (NYSE:VALE) which is being actively explored by the $69 billion mining giant.
The location of artisanal workings and current exploration activity by Vale suggests that the general trend of mineralisation is directed towards the Kalengwa South tenement.
The permits are located in the North-Western province of Zambia, in the Kasempa district, which is proving to be somewhat of a hot spot for mining investment, with its potential to host large scale, high grade copper deposits.
Not surprisingly, Kalengwa South has been determined to be the flagship project in the portfolio, and covers 557 square kilometres.
The other three permits are contiguous and together comprise the Kalengwa East project totalling 2,632 square kilometres.
In addition to the historical drilling, there are four small scale mining licences within the boundary of Kalengwa South where artisanal mining has been conducted for many years.
Notably, less than 10% of the total permit area has been explored to date.
Integrated has engaged an experienced in-country manager, previously employed as a technical executive for a major mining company operating in Zambia, and who has overseen multiple economic copper discoveries.
The acquisition terms include a signing fee of US$120,000 to be paid from existing cash reserves, and a US$50,000 exclusivity fee, which was paid in December 2013.
To acquire an initial interest of 51% in all four tenements, Integrated must expend US$325,000 on exploration over 15 months, with an additional 34% to be granted following expenditure of US$500,000 over an additional 24 months.
The remaining 15% interest may be retained by the vendor by meeting pro-rata expenditure, or may be acquired by Integrated through issue of equity.
The transaction remains conditional upon final due diligence and approval from the Zambian regulatory authority.
In addition to the Kalengwa transaction, the company is also in active negotiations for the acquisition of other Zambian copper assets to complement these projects and establish Integrated as a significant copper explorer in the country.