Tempest Minerals Ltd (ASX:TEM) has signed a non-binding conditional Memorandum of Understanding (MoU) with Karara Mining Ltd (KML) seeking to enter into an exploration joint venture (JV) over KML’s exploration leases along strike from the Karara Magnetite Iron Mine in Western Australia.
Under the MoU, Tempest will have the exclusive right to earn up to a 70% legal and beneficial interest in KML’s assets over a four-year earn-in period.
The exploration package includes 138 square kilometres of highly prospective yet underexplored Yalgoo Greenstone Belt which is adjacent to the 100%-owned TEM Euro Project.
“Natural synergy”
Commenting on the MoU signing, KML senior executive Dr Gaomai Trench said: “We are excited to begin this new chapter at the Karara Project.
“With KML’s renewed focus on production at the Karara Magnetite Mine, there is a natural synergy to work on our projects with Tempest who are actively exploring in the region.”
MoU summary
The MOU provides a non-binding agreement with the aim of entering a joint venture over KML’s exploration ground where Tempest has the exclusive right to earn up to 70% of the project area over four years.
If Tempest earns an interest in the assets, the parties intend to enter into an unincorporated exploration joint venture for the assets.
The transaction's terms are:
- Stage 1 (commencement): Tempest will issue to KML (or its nominee) $30,000 in fully paid ordinary shares or pay $30,000 in cash and will have the right to earn a 51% interest in the assets (Stage 1 Interest) free from encumbrances by incurring A$800,000 of exploration expenditure on the tenements over a period of two years and six months.
- Stage 2: On earning the Stage 1 Interest, Tempest can elect to carry on to the stage 2 earn-in period to earn the stage 2 interest of up to 70% of the project. TEM will issue to KML (or its nominee) $20,000 in shares or pay $20,000 in cash and will have to spend A$400,000 of exploration expenditure on the tenements over a period of two years.
About Karara
KML’s Karara Iron Mine is 200 kilometres southeast of Geraldton in Western Australia.
Karara is the first and largest magnetite mine in the Western Australian Mid-West and has an expected life of 30+ years which underpins sustainable benefits to the regional community.
The operation includes a large open-pit mine, complex ore processing and beneficiation plant and significant infrastructure and logistics networks.
Tempest is exploring the abutting 100% Euro Project where it recently announced multiple polymetallic intersections in drilling. The company believes the geology at Euro is contiguous into the new JV ground.