Navan Resources and Tara Mines have signed a joint venture agreement to explore zinc-lead deposits covering a large area in the midlands and the west. The deal involves Tara Mines spending $2.5 million (£1.8 million) over four years to acquire 51 per cent of the licences, currently wholly owned by Navan Resources.

The licences are located in Meath, Westmeath, Longford, Roscommon and Galway.

The deal represents a significant expansion for Tara Mines, whose only ore body in Navan will be close to exhaustion in a decade.

Neither company will make any predictions about the return the deposits might produce, but Navan says it is looking for "another Tara". Anything below 15 to 20 million tonnes would make mining uneconomical in the kind of ground where the licences are situated.

There are over 30 prospecting licences involved in the joint venture, covering an area of 1,200 square kilometres.

Navan Resources recently acquired a 100 per cent interest in the licences, following the withdrawal in September of the previous joint venture partner, CECI Pty, a subsidiary of MIM Exploration of Australia. According to Navan, this was a "corporate decision" and not related to the potential of the deposits.

The geological sequence being targeted by the two companies is known as the Pale Beds and holds the Republic's largest zinc/lead deposit, which has been operated by Tara Mines for over 20 years.

So far this deposit has produced 46 million tonnes, grading 8.5 per cent and 2.1 per cent lead, with further reserves and resources totalling in excess of 30 million tonnes.

Tara Mines says its investment will be continued after the four years, if the returns "look positive".

Tara Mines is owned by the Finnish mining and metals group, Outokumpu.

Both companies say a drilling exploration programme could take more than four years and early indications of potential involved will not be known for some time.

If mining is to be undertaken, planning permission will be needed and this may result in objections from local people - many of the deposits lie close to towns.