Kairos Minerals Ltd (ASX:KAI, OTCQB:KAIFF) has signed a Mineral Rights Agreement (MRA) with PLS, securing all mineral rights other than lithium and tantalum across three PLS exploration licences and one application totalling 367 square kilometres, and clearing early access to a ‘Priority Area’ to start drilling.
The MRA follows Kairos’ August 2024 sale of non-core assets to PLS and reflects non-binding key terms agreed under the Tenement Sale Agreement (TSA) signed on July 30, 2024. Under the MRA, Kairos will pay a 2% gross-revenue royalty on any minerals recovered and sold from the relevant licences.
PLS has granted Kairos conditional early access to the Priority Area on licence E45/2241 to start a 50-hole, 10,000-metre drill program over the Main Hill Extension, with a program of works submitted with PLS consent to expedite drilling. Kairos’ broader rights across the remaining tenements and the application will commence once the MRA conditions are satisfied.
The Main Hill Extension is a 1,500-metre continuation of the Mt York mineralised banded iron formation (BIF), increasing the deposit length to 4,500 metres. Positive drill results would directly add to Mt York’s current 1.4 million ounce gold resource inventory.
Kairos also expects the second $10 million PLS payment—subject to the grant of mining lease application M45/1307 or other agreed tenure under the TSA—by the end of 2025.
“I extend my gratitude to all members of the PLS and Kairos teams who have made this agreement possible – we look forward to working together as partners in the licences and neighbours in our respective, exciting projects and developments,” Kairos managing director Dr Peter Turner said.
“For Kairos, this is a landmark moment in the company’s history as we take ownership of the mineral rights (excluding lithium and tantalum) to a prolifically mineralised belt of rocks that we know contains the extension of our Mt York Gold Project. It also provides blue-sky exploration upside to 367km2 of fertile ground, that has not been systematically explored for gold, despite having lookalike geology to Mt York.
“We now turn our attention to drilling out the project, where previous PLS drilling delivered some exciting gold grades and widths that affirm our view that the entire Mt York deposit is a large, continuous gold system.
“We are confident of success to make Mt York one of the largest, undeveloped, free-milling gold projects in the Pilbara and importantly, Western Australia.”
Key terms of the MRA
The MRA between Kairos and PLS grants KAI all mineral rights, except lithium and tantalum, across 367 square kilometres (km²) covering three Pilbara Minerals (PLS) exploration licences and one application in the Mount York/Pilgangoora area.
Kairos and PLS tenements. The Kairos mineral rights, excluding lithium and tantalum apply
to the green licences shown on the image above.
Key terms:
- Conditions precedent include Kairos covenanting to observe PLS obligations under certain third-party agreements relating to the PLS tenure.
- Kairos must follow prescribed notice procedures when seeking PLS consent for any programme of works (PoW); the PoW for early drilling in the Priority Area has already been consented to by PLS, with consent to be considered under an agreed priority regime.
- Kairos must comply with all tenement conditions, MRA notice requirements and procedures.
- Upon satisfying conditions precedent, Kairos gains access to the PLS Priority Area and may conduct authorised activities.
- Kairos is responsible for rehabilitation arising from its activities and will provide escrowed funds as security.
- Activity priority applies: Kairos in the Priority Area and PLS in the PLS Priority Area.
- Subject to any necessary MRA amendments, Kairos may require PLS to apply for a mining lease over the Priority Area following an economic discovery, and may request meetings to consider other tenure as reasonably necessary.
- Kairos indemnifies PLS, its subsidiaries and related personnel for activities under the MRA.
- PLS will maintain licences in good standing; both parties may cooperate on exploration, data, infrastructure and rehabilitation.
Kairos holds priority of operations within a defined “Priority Area” on licence E45/2241, covering the north-west extension of the Mt York Gold Project. Pilbara Minerals (PLS) retains priority across all other licence areas on a non-exclusive basis. The parties may cooperate on exploration, data gathering, infrastructure sharing and coordinated rehabilitation.
Kairos must comply with all tenement conditions and laws, including expenditure reporting, site policies and required flora, fauna and heritage surveys. Before any ground-disturbing work, Kairos must deposit rehabilitation security into a PLS escrow account; funds are returned once rehabilitation is completed to PLS’s satisfaction.
Termination rights include:
- Immediate termination if conditions precedent are not satisfied or waived by July 9, 2026, with Kairos able to elect a 2% gross revenue royalty on non-lithium/tantalum minerals.
- Immediate termination if tenements are surrendered, cancelled, forfeited or expire; upon a sale of Mt York; if application M45/1307 is refused; or if a general purpose lease over M45/1307 is refused.
- Termination for unremedied material breach within 10 business days, or for non-remediable breach.
- PLS has a first right of refusal if Kairos seeks to assign or transfer its MRA rights, with 20 business days to match, consent or reject. The agreement includes customary dispute resolution and confidentiality provisions.
Kairos targets Main Hill extension with 10,000 metres drill program
Kairos will launch a targeted campaign over the Mt York northwest extension on Pilbara Minerals’ licence E45/2241, aiming to convert the ‘Priority Area’ into an initial resource addition to the 1.4 million ounce Main Trend.
The company plans about 50 holes for 10,000 metres (m) across the 1,500 metres strike, with at least 18 drill fences designed to fully intersect the banded iron formation (BIF) host rocks. The company views prior PLS holes as reconnaissance that often did not reach the target horizon or ended in mineralisation.
Plan view of the western side of Main Trend showing the northwestern part of Main Hill Prospect with drill intercepts and the Main Hill Extension prospect on the PLS licence E45/2241 in the
‘Priority Area’. ‘Monster’ area drill hole 25MYDD031 is shown.
Reverse circulation (RC) drilling will comprise 75% of metres and be run by two rigs. Diamond drilling will target key zones to capture resource, geotechnical, structural and metallurgical data. Kairos is negotiating with several RC contractors and will retain DDH1 for diamond services.
All drilling results and geological data will feed resource modelling. This will be the first resource estimate for this part of the deposit and will be added to the existing Main Trend resource. 2025 Main Trend drilling will also inform the model.
Drilling is expected to begin in October and conclude by December 2025.
TSA funding update
Under the Tenement Sale Agreement (TSA) signed July 30, 2024, Kairos received A$10 million on September 5, 2024 and expects a second A$10 million (cash or PLS shares, at PLS’s election) following the grant of M45/1307 or agreed tenure by end-2025, supporting the 2025 program.
Next steps
Kairos will complete the reverse circulation (RC) drilling tender and finalise the Stage 1 program across the Main Trend, undertaking routine reviews as results come to hand.
Earthworks for drill pad construction will begin ahead of RC and diamond campaigns.
In parallel, the company will compile all geological and assay data from resource drilling to support an updated Mineral Resource Estimate, while advancing negotiations with Nyamal Aboriginal Corporation toward a mining agreement. Once core is available from fresh, transitional and oxide ore, Kairos will initiate detailed studies, including advanced metallurgical test work, to inform future development decisions.