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(Sharecast News) - European Green Transition announced an exclusive six-month option agreement with Recovery Metals Cyprus (RMC) for the potential sale of its Pajala Copper Project in northern Sweden on Thursday, marking a step forward in its strategy to monetise mining assets and refocus on revenue-generating businesses.
The AIM-traded firm said the agreement gave RMC the right to acquire the Livivaara nr 101 and Lehtoslk nr 101 exploration licences, which together make up the Pajala Copper Project.
It said the project represented a potential iron oxide copper gold (IOCG) target, with historical drilling by Anglo American identifying broad intervals of copper mineralisation suggestive of a significant deposit.
RMC would fund all due diligence during the option period, with any acquisition subject to the negotiation of definitive transaction documents.
"We are pleased to have signed an exclusive option agreement with RMC for the proposed sale of our Pajala Copper Project in Sweden, marking a significant step in the execution of our strategy to generate value from our mining portfolio," said Cathal Friel, co-founder and non-executive chairman.
"The agreement provides RMC with sufficient time to complete its due diligence on the project, supported by their team who have prior operational experience in the region."
Friel added that copper prices were approaching record highs, underpinned by limited supply and strong market fundamentals.
"Growing investment in electrification and clean energy technologies together with policy measures such as the EU Critical Raw Materials Act is driving sustained demand for both copper and rare earth elements, reinforcing the potential strategic importance of EGT's mining assets within the European supply chain."
The Pajala Copper Project covers about 51 square kilometres in Sweden's Norrbotten County, around 21 kilometres from the Kaunisavaara iron ore mine.
The site benefitted from strong local infrastructure and access to renewable energy, EGT said.
Historical drilling by Anglo American between 2000 and 2001 returned several intersections of copper and gold mineralisation, including 5.45 metres at 1.23% copper and 1.13 grams of gold per tonne.
At 1055 GMT, shares in European Green Transition were up 13.04% at 6.5p.
Reporting by Josh White for Sharecast.com.