Monax Mining (ASX: MOX) and a wholly-owned subsidiary of major Chilean copper producer Antofagasta (LON: ANTO) have agreed to proceed to the next stage of a farm-in option at the Punt Hill Copper-Gold project in South Australia.
Under the agreement, Antofagasta can earn a 51% interest in Punt Hill, located within the Olympic Iron-Oxide copper-gold (IOCG) province, by expending US$4 million over four years.
Antofagasta has currently expended $US3.9 million and has approved the next phase of exploration including further drilling, which will trigger Phase 2 of the agreement.
Under the original terms, Antofagasta can earn an additional 19% equity by expending a further US$5 million on exploration and development over two years.
If a development decision is made, Antofagasta will pay Monax a success fee of US$10 million.
Monax and Antofagasta have renegotiated the terms for Phase 2 to increase the time frame from two to four years.
Further, under the initial agreement, Antofagasta was to provide a scoping study at the end of
Phase 2. This requirement has been removed as part of the renegotiated terms.
Monax is planning to undertake a detailed ground gravity survey over two areas and three potential drill targets have been outlined for testing in the first half of 2014.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.