West-based Mining Projects Group (ASX: MPJ) will acquire a 70% interest in three granted exploration leases, where initial geophysical work indicates similarities to the Nova nickel discovery owned by Sirius Resources (ASX:SIR) in the Fraser Range in Western Australia.
The exploration leases E28/2271, E63/1594 and E69/3082, are 566km2 in total; providing MPJ with a sizeable "foot-print" in the highly prospective nickel-copper and gold province in Fraser Range.
Key terms of the deal
MPJ will pay an initial cash payment of $50,000 to Epi Energy Pty Ltd and also:
- Issue of 20 million MPJ fully paid shares and the issue of 15 million 1 cent options on formation of a JV
- Escrow (voluntary) of 12 months on the EPI shares
- A deferred cash payment of $200,000 payable before the 15th November 2013
- MPJ has a 12 month period to pay the deferred cash payment
- EPI will maintain a 30% free carry interest through to the stage of Bankable Feasibility Study
Rationale for the acquisition
A geophysicist reviewed and provided an interpretation of the regional geophysical data available on EL69/3082.
Interpretations suggest the tenement area has been intruded by a series of granites which are circular to ellipsoidal in shape and contain highly magnetic intrusive material possibly mafic to ultramafic.
The most prominent intrusion identified has been interpreted by the consultant as a significant bullseye target and is approximately 50kms to the west of the recent Nova discovery.
Whilst the independent interpretation is based on limited low resolution data, it did not provide any certainty towards defining a resource, but displayed the geological potential to host mineralisation.
This formed the basis for MPJ’s decision to move forward with the JV and commit to an exploration program to investigate the mineralisation within this tenement area.
Of note, the entire Fraser Range region is dominated by a north east fabric with strong cross cutting features interpreted to be structurally controlled.
The interpreted mafic/ultramafic intrusions are at the intersection of several of these structures and MPJ believes these warrants an early stage investigation to test its potential.
Recent nickel discoveries have been made in the Fraser Range through drilling programs following up on prospective targets identified from extensive geophysics and soil geochemistry.
This will be the process used for identifying prospective drilling targets within these exploration leases in the near future.
The deal puts Mining Projects Group in a prime position to explore in the uber-prospective Fraser Range Orogen, with interpreted mafic/ultramafic intrusions, that would seem to bear similarities to Sirius' Nova nickel discovery.
While early days, EL69/3082's similarities to Nova opens new dimensions and upside for MPJ, and tincture of a discovery and given it is so lightly valued at just $0.06 and with a market cap. of only <$3 million, it is off to the races for MPJ.
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