Zenith Minerals strikes lucrative deal, sells remaining stake in Develin Creek to QMines

Zenith Minerals Limited has announced the successful completion of the sale of its remaining 49% interest in the Develin Creek Copper-Zinc Project to QMines Limited. The transaction, valued at A$1.66 million, represents a significant step in Zenith’s strategic direction, focusing on its gold and lithium projects. As part of the deal, Zenith received a cash payment of A$975,000 and an additional A$687,500 in QMines shares, which equates to 10,261,194 fully paid ordinary shares. These shares will be held under a five-month voluntary escrow period.

Zenith’s Managing Director, Andrew Smith, expressed his satisfaction with the agreement, stating that the sale highlighted the strong collaboration between the two companies. The transaction marks the culmination of a detailed metallurgical testwork program and reflects the ongoing commitment of Zenith to deliver shareholder value. While QMines will now assume full responsibility for the Develin Creek project, Zenith plans to direct the proceeds toward its promising gold and lithium assets, with drilling expected to commence soon at DFN.

This agreement forms the second and final stage of a previously announced two-part deal. Initially, the companies agreed to adjust the consideration based on the results of testwork. The share issuance for Zenith was approved during QMines’ General Meeting on 23 September 2024. This final step in the transaction was slightly delayed from the original settlement date to accommodate the necessary shareholder approvals.

A Continued Collaboration

Although Zenith has divested from Develin Creek, the company now holds a substantial stake in QMines, underscoring a continued collaborative relationship between the two entities. The partnership has set the foundation for future cooperation, which Zenith anticipates will lead to further growth opportunities. This sale aligns with Zenith’s strategic shift toward leveraging its gold and lithium assets, an area where the company sees significant potential for exploration and development.

Expert Opinion on the Deal’s Impact

Mining industry analysts see this deal as a prudent move by Zenith Minerals. By offloading its interest in Develin Creek, Zenith has unlocked capital that will be reinvested in its exploration efforts for gold and lithium. According to mining expert James Carter, the timing of this transaction is beneficial for Zenith: “The sale of the Develin Creek stake allows Zenith to capitalize on its strong assets in more lucrative markets like gold and lithium. The demand for these commodities, particularly lithium, is expected to grow significantly due to the global energy transition.”

QMines, meanwhile, is set to benefit from full ownership of Develin Creek, with experts predicting further development under its guidance. The additional funding and shares received by Zenith through this sale will position the company to ramp up its exploration efforts and possibly expand its project portfolio in the near future.

What’s Next for Zenith?

The proceeds from this deal will be channeled into Zenith’s next phase of exploration, with a particular focus on its DFN gold project. Drilling activities at DFN are scheduled to commence within the next two weeks, signaling the company’s active pursuit of new discoveries in its portfolio. Zenith is bullish on its future prospects, particularly in gold and lithium, two sectors poised for robust growth in the coming years.

With the sale of Develin Creek completed, Zenith is set to focus on its high-priority projects, positioning itself for long-term success. Investors are now keenly watching how these developments will unfold and what opportunities might emerge as a result of this strategic shift.