Buxton Resources Ltd (ASX:BUX) has entered into a joint venture agreement with Independence Group NL (ASX:IGO) in respect of its nickel tenements located in the Fraser Range of Western Australia.
Under the terms of the agreement, Buxton has granted Independence Group the exclusive right to acquire a 90% interest in the tenements by immediately paying $1.5 million in cash.
The parties have agreed that Buxton will retain the right to explore and develop iron ore on the tenements.
The tenements included in the agreement are Buxton’s Zanthus and Widowmaker tenements.
The Zanthus Magnetite Project contains an initial inferred JORC Resource of 103.6 million tonnes at 26.5% iron, with a potential to expand the resource.
Buxton’s Widowmaker Project is located 22 kilometres along strike of Independence’s Nova Project, within the Fraser Range Nickel Province.
As per the agreement, Buxton will be free-carried during exploration by Independence until such time as a decision to mine is made in respect of the tenements.
At this point, Buxton may elect to participate in the development by contributing capital on a pro-rata basis.
Alternatively, Independence can purchase Buxton’s 10% interest for market value, or pay a net smelter return royalty.
The new joint venture is expected to enable Buxton to re-focus its resources to fast-track the promising Double Magic nickel and copper project in the Kimberley region of Western Australia.
Buxton held $1.5 million in cash as at 30 June 2016.
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