Alien Metals Ltd (AIM:UFO, OTC:ASLRF) has entered into an agreement to buy the Vivash Gorge iron ore project in the Pilbara region of Western Australia from Zenith Minerals Ltd (ASX:ZNC).
AIM-traded Alien said the project was a strategic acquisition that would add to its portfolio of direct shipping ore (DSO) iron ore projects - Hancock and Brockman - within the Pilbara region.
Alien will pay an initial £56,500 in shares to ASX-listed Zenith with further payments subject to certain milestones being reached.
Vivash Gorge covers about 47km2 and is located 60km south of Alien’s Brockman project. Fortescue Mining Group Ltd, one of the world's largest iron ore producers, has defined a high-grade iron ore resource of 28 million tonnes at 58.8% iron over the neighbouring Vivash SW Resource, which abuts the eastern central boundary of the Vivash Gorge tenement.
"The potential acquisition of the Vivash Gorge iron ore project from Zenith Minerals will be a great addition to our growing iron ore portfolio,” said Alien’s chief executive Bill Brodie Good.
Fortescue has historically drilled up to the Vivash tenement boundary, returning high-grade results such as 70 metres at 60.5% iron from the surface. Based on the geological mapping and proximity and strike of the Vivash SW Resource, Alien said it considers that the Vivash SW Resource continues into the Vivash Gorge tenement, providing a “walk up” drill target.
“Given the adjacent DSO grade deposits defined by iron ore major Fortescue Metals Group (ASX:FMG), coupled with what we believe to be the tenement's highly prospective yet untested geology, Vivash Gorge provides Alien with a third strategically located high grade iron ore project within the Pilbara region,” said Brodie Good.
Zenith has already been granted a programme of work (POW) for drilling of up to 150 holes of a maximum of 200 metres each, giving Alien immediate access.
Alien has also agreed to grant Zenith an ongoing royalty payment whilst in production of $1.00/dwt (Dry Wet Tonnes) of the quantity of shipped ore derived from the area.