Kimberley Diamonds Limited has snapped the rights to Investigation Permit No. 14.977, a package of tenements covering the gold-rich Lomero-Poyatos massive sulphide deposit, located within the Iberian Pyrite Belt, Spain’s premier mining district.

According to the company, the 100% acquisition of the rights to the Lomero-Poyatos project, which KDL won through a competitive tender process run by the government of the Andalusia province, represents a key step in the process of spinning out KDL’s copper-gold assets.

KDL Executive Director Rod Sainty on Tuesday attended a press conference with the Minister for Economy, Innovation, Science and Employment and other government delegates, where the company was formally awarded the rights to the Lomero-Poyatos project, now KDL’s new flagship copper-gold project.

KDL is not required to pay any consideration for these tenements upfront.

“To maintain these tenements, KDL is required by the Andalusian government to spend €400,000 on exploration expenditure in Year 1 and a further €5 million spread over Years 2 and 3. As KDL is not required to pay any upfront consideration for this acquisition, it has no current impact on KDL’s existing activities, other than the required exploration expenditure.”

The company revealed that at the time of acquiring the Ellendale diamond mine in February 2013, it had a number of copper-gold exploration tenements in its exploration portfolio. Since the acquisition, the company believes it has not received full value by the market for its portfolio of copper-gold assets.

“As such, KDL has actively sought a flagship copper-gold project to complement these assets with the view to spinning out the combined portfolio of non-diamond assets into a new entity. Existing KDL shareholders would be given shares in the new entity through an in specie distribution, with the new entity to be listed in due course,” it said.

“KDL currently intends that this spin-off occur in the next 6-12 months. The new entity would provide KDL shareholders with the opportunity to gain exposure to a promising new project and copper and gold markets in general.”

Kimberly praised Spain for its highly prospective geology, pro-mining government policies and markedly lower costs of production relative to those in Australia and has been as an ideal environment in which to gain a strategic foothold.

Prior to its closure in 1991, the Lomero-Poyatos mine produced at least 2.6 million tonnes of massive sulphide ore containing 5 g/t gold and 1.2% copper. The gold grade is unusual and the highest of all the deposits within the Iberian Pyrite Belt.