The Board of Western Areas Ltd announced an expansion of the Company’s Western Gawler regional exploration strategy via the execution of a Farm‐in and Joint Venture Agreement (the Agreement) with Iluka (Eucla Basin) Pty Limited (Iluka), a 100%‐owned subsidiary of Iluka Resources Limited.
Consistent with the Company’s ongoing commitment to pursuing strategic regional exploration opportunities, this Agreement facilitates a staged program for Western Areas to acquire up to a 75% interest in base and precious metals rights, and all additional basement‐hosted mineral and rare earth elements, (“metal rights”) across five key tenements in the Western Gawler region of South Australia, with Iluka retaining all rights to mineral sands elements. The tenements, which cover 5,070km2 (see figure 1), are contiguous with Western Areas’ substantial existing tenure within the Western Gawler region of South Australia, the combination of which effectively represents 100% of the highly prospective Fowler Domain.
The project represents significant discovery potential for high grade massive sulphide poly‐metallic mineralisation, iron oxide‐copper‐gold (IOCG) and orogenic gold deposits.
Key Terms of the Agreement with Iluka:
Western Areas may earn interests in the JV tenements (EL 5217, EL 5452, EL 5675, EL 5878 and EL 5879) by spending as follows:
- Stage 1: Western Areas may acquire 51% Joint Venture metals rights interest in the tenements by expending $2.75 million within three years of the Agreement date, with a minimum expenditure of $0.75 million in the first year and an additional $1 million expenditure in each of the second and third years;
- Stage 1 Completion: Following the completion of Stage 1, a Joint Venture in relation to the metal rights will be formed between the parties, with the initial participating interest being Western Areas 51% and Iluka 49%;
- Stage 2: Western Areas can earn a further 24% Joint Venture interest in the metal rights by expending $3 millionwithin four years, commencing from the date on which the Stage 1 earning period ends; and
- Stage 2 Completion: Following the completion of Stage 2, the participating interests in the Joint Venture will be Western Areas 75% and Iluka 25%.
Managing Director, Dan Lougher commented: “Western Areas has been conducting due diligence on a number of farm‐in and joint venture opportunities as part of our regional exploration strategy and we are extremely pleased to extend our existing presence in the Western Gawler via this new opportunity. We believe it offers the significant additional discovery potential that we are looking for.
“Regional exploration sits alongside our Forrestania and Cosmos exploration programs. We have been very clear that, with our positive cashflow generation, we would look to access opportunities where the initial investment is relatively low, but the potential rewards are high. Our exploration team is ready to begin a work program aimed at identifying high priority drill targets, building on the significant geophysical programs and target generation work that Iluka has completed over the last 4 years,” said Mr Lougher.