Serabi Gold PLC on Wednesday said it has signed a strategic exploration deal with Vale SA, through its subsidiary Salobo Metais SA.

The Brazil-focused gold miner said the alliance is focused on exploring its Matilda prospect and other targets within the Tapajos region of Brazil, aimed at discovering large-scale copper projects within its Palito Complex tenement area.

The firm said Vale will fund up to $5.0 million of the exploration.

Following the first phase, Vale has the option to continue exploration and fund one or more copper projects to the pre-feasibility study stage.

Serabi said Vale will have an option to acquire 75% of a joint venture company incorporated by Serabi for $5 million, with the option to acquire a further 15% for a further $5 million or 1.5% of the net present value of the project, if that represents a higher value.

Serabi also has the option to sell the remaining 10% from $10 million, and a 1.5% net smelter royalty.

Chief Executive Michael Hodgson said: ‘Making the discovery of the Matilda porphyry prospect in 2022 was a major milestone for Serabi. However, bringing in a partner with the expertise and resources of Vale, will enable us to properly evaluate Matilda and the other significant targets within our tenement area, and move them forward more quickly. The exploration alliance is focused on large scale copper projects and allows Serabi to maintain its attention on its gold exploration targets.

‘Vale represents an excellent partner for Serabi and we are delighted to be working with them to begin unlocking the potential of the Tapajos region.’

Serabi shares rose 7.4% to 33.30 pence each in London on Wednesday morning.

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