Monax Mining, Antofagasta commit to copper-gold exploration in South Australia
Monax Mining (ASX: MOX) and a wholly-owned subsidiary of major Chilean copper
producer Antofagasta (LON: ANTO) have agreed to proceed to the next
stage of a farm-in option at the Punt Hill Copper-Gold project in South
Australia.
Under the agreement, Antofagasta can earn a 51%
interest in Punt Hill, located within the Olympic Iron-Oxide copper-gold
(IOCG) province, by expending US$4 million over four years.
Antofagasta
has currently expended $US3.9 million and has approved the next phase
of exploration including further drilling, which will trigger Phase 2 of
the agreement.
Under the original terms, Antofagasta can earn an
additional 19% equity by expending a further US$5 million on
exploration and development over two years.
If a development decision is made, Antofagasta will pay Monax a success fee of US$10 million.
Monax and Antofagasta have renegotiated the terms for Phase 2 to increase the time frame from two to four years.
Further, under the initial agreement, Antofagasta was to provide a scoping study at the end of
Phase 2. This requirement has been removed as part of the renegotiated terms.
Monax
is planning to undertake a detailed ground gravity survey over two
areas and three potential drill targets have been outlined for testing
in the first half of 2014.
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