Resolution Minerals Ltd (ASX:RML) has executed a multi-year farm-in and joint venture agreement with copper focused OZ Minerals Ltd to fast-track the search for copper discoveries on the Wollogorang Project in the Northern Territory.
This agreement entitles OZ to earn up to 51% of the project by spending $4.9 million over five years.
Resolution will remain project operator during the farm-in period and may retain its 49% by participating in exploration from year six onwards.
Drilling at the project
Wollogorang Project covers a 3,825 square kilometres footprint in the Northern Territory’s McArthur Basin.
The company has recently completed a 2,000 line-kilometre airborne VTEM geophysics survey on the eastern half of the project and identified 40 conductors with 37 of these untested by drilling.
Resolution believes drill targets will be refined from ongoing interpretation of the VTEM results in collaboration with OZ.
RML recognises the potential of the Northern Territory, which ranks in the top 20 of the best mining jurisdictions in the world by the Fraser Institute (2020) and is relatively underexplored.
The company believes this agreement will enable it two advance its two major projects simultaneously – the other being the 64North Gold Project in Alaska which surrounds Northern Star’s 11 million ounces Pogo Gold Mine – putting the company in a strong position as a junior explorer.
“Copper a fundamental ingredient”
Resolution managing director Duncan Chessell said: This is a very exciting development for Resolution’s shareholders.
“Copper is a fundamental ingredient to the renewable energy future of the planet.
“Resolution Minerals is very pleased to be partnering with copper focused producer OZ Minerals, to explore together for copper at Resolution’s Wollogorang Project in the Northern Territory.
“The JV agreement with OZ Minerals is recognition of the copper prospectivity of the Wollogorang Project.”
Potential highlighted
Chessell said: “In particular, the results of our recent airborne VTEM geophysics survey that identified dozens of untested conductors and highlighted the sedimentary hosted copper potential of the project.
“The partnership with OZ Minerals has secured long-term funding, technical exploration collaboration and mining expertise to explore the currently identified targets with the potential to discover the next large-scale copper mine in the Northern Territory.
“The 25% carried interest for Resolution to a decision to mine is a significant value-add for RML shareholders without dilution.
“The Wollogorang Project is located within the McArthur Basin which hosts the world-class McArthur River lead-zinc mine and is surrounded by mid-tier and major companies including BHP, Rio Tinto and Teck.”
Material terms of agreement
Resolution, through wholly-owned subsidiary Mangrove Resources Pty Ltd, has entered into a binding Heads of Agreement – Farm-in and Joint Venture with OZ Exploration Pty Ltd, a wholly-owned subsidiary of OZ Minerals Ltd.
Under the terms of the agreement, OZ can earn up to a 75% legal and beneficial interest in the mineral exploration tenements, EL30496, EL30590, EL31272, EL31546, EL31548, EL31549 and EL31550 in the Northern Territory.
To earn a 51% interest in the Wollogorang Project, OZ will have to spend $1.6 million in exploration activities in the initial two-year period, followed by a further $3 million expenditure in the next three years besides paying $300,000 to Resolution for the VTEM survey.
If OZ fails to spend $4.9 million within the five years, Resolution can retain 100% interest in the project.
OZ can accelerate earning to any milestone by meeting the expenditure requirements early and can over-spend in any stage to carry forward to the next stage.