Royal Road JV wins bid for Saudi exploration licence

Royal Road Minerals (TSXV: RYR) announced Monday that its Saudi Arabian joint venture vehicle, Royal Roads Arabia (RRA), has been given preferred bidder status for the Jabal Sahabiyah exploration licence in Asir province.

The JV was established on a 50/50 basis with Saudi investment holding company MSB for the purpose of copper and gold exploration in the kingdom. Royal Road is operator of the JV, which has submitted exploration licence applications over certain areas of interest.

The licensing round for Jabal Sahabiyah was announced by Saudi Arabia’s Ministry of Industry and Mineral Resources (MIMR) in early 2023, and proposals were submitted by August, the same month the JV vehicle was created.

According to Royal Road, the submissions were “appraised on merit and required the preferred bidder to demonstrate skill-relevant and suitably qualified management and technical personnel, access to sufficient resources, and to prove high-level performance and a commitment to the principles of sustainability.”

It added that specific assessment criteria included such aspects as proposed exploration work program, exploration spend, technical expertise and social impact management plan.

The Jabal Sahabiyah exploration licence covers approximately 284 km² in area. It was discovered as a result of regional mapping by Riofinex in the late 1970s. The prospect is located in the Nabitah-Tathlith belt and consists of copper-zinc-lead mineralized gossans and vein-gold occurrences hosted in greenschist and amphibolite facies meta-sedimentary and granitoid rocks.

Twenty shallow percussion drill holes (totaling 617.5 metres) were drilled into one of the gossan occurrences by Riofinex, with best results being 14 metres at 0.6% copper and 5.1% zinc and 6.5 metres at 0.9% copper and 0.6% zinc, both from surface.

“We are grateful to the MIMR for granting us this opportunity at Jabal Sahabiyah, and we are eager to get started. Over 40 years have lapsed since exploration work was conducted at the prospect area and ore deposit studies, surface and subsurface exploration techniques have advanced significantly over that period,” Royal Road CEO Tim Coughlin said in a press release.

Coughlin added the company “will be deploying our own drone-borne hyper-spectral scanner, gamma ray spectrometer and magnetometer and expect to have teams on the ground, mapping and sampling at Jabal Sahabiyah imminently.”

As the preferred bidder, RRA will be granted the Jabal Sahabiyah licence subject to the payment of a performance financial guarantee (to be agreed with MIMR) and the satisfaction of certain legal and regulatory requirements.

The licence will have an initial term of five years, with an option to renew every further five years for a total of 15 years. RRA has committed to minimum expenditure of $5.5 million (20.65 million Saudi riyal) over the first five years. Expenditure is success dependent subject to surrender of the performance guarantee.

Shares of Royal Road Minerals surged 10.5% by 2:30 p.m. ET in Toronto following the announcement. The company has a market capitalization of C$26.5 million ($19.7m).