Australian nickel miner Western Areas Ltd. has signed farm-in and joint-venture agreements with Gunson Resources and Monax Mining covering their adjacent exploration properties in the Western Gawler region of South Australia. The agreements provide a staged program for Western Areas to acquire up to a 90% interest in a number of key tenements having a total area of approximately 2,746 km2.
Western Areas’ exploration program will target opportunities having significant discovery potential for high-grade massive sulphide poly-metallic mineralization.
Regarding the Gunson and Monax agreements, Western Areas Managing Director Dan Lougher said, “Western Areas has been conducting due diligence on a number of farm-in and joint-venture opportunities over the last six months as part of our regional exploration strategy, and we believe the Western Gawler opportunity offers the significant discovery potential we are looking for…Our exploration team is ready to immediately begin a work program aimed at identifying high priority drill targets.”
Western Areas is targeting the combined joint-venture areas as a single project to capture the continuity of the stratigraphy, which is believed to be prospective for mafic-ultramafic hosted nickel-copper-PGM sulphides, as well as iron oxide copper gold and Proterozoic gold deposits. The project area is located about 925 km northwest of Adelaide, close to existing infrastructure, including roads and a port.
The initial work program is planned to consist of detailed airborne geophysical surveys over the project area. A combination of drilling and further geophysics will then be used to screen the initial targets and generate further targets for detailed assessment.
Western Areas can acquire a 75% interest in the Gunson tenements by spending A$0.8 million within 2.5 years of the agreement date and can elect to earn an additional 15% interest by the additional spending of A$0.4 million within an additional 18-month period. Following completion of this spending, a 90% Western Areas/10% Gunson joint venture would be formed. Gunson may convert its remaining 10% interest to a 1% net smelter royalty.
The terms of the Monax agreement are the same as those of the Gunson agreement except for a minimum committed expenditure of A$0.4 million, over 1.5 years within Stage 1 before Western Areas may withdraw.
Perth-based Western Areas operates the Flying Fox and Spotted Quoll nickel mines and the Cosmic Boy concentrator at its Forrestania operations in southwest Western Australia. The company is forecasting production of 24,500 to 25,500 mt of nickel in concentrate during its current fiscal year, ending June 30, 2015.