PERTH (miningweekly.com) – Dual-listed IMX Resources has agreed to a $60-million farm-in with MMG Exploration Holdings over the company’s Nachingwea project, which includes the Ntaka Hill nickel sulphide deposit, in Tanzania.

The Ntaka Hill project has a Joint Ore Reserves Committee-compliant measured and indicated resource of soe 120 000 t of contained nickel, as well as an inferred resource of 238 000 t of nickel, at an average grade of 0.66% nickel.

A 2012 scoping study placed a price tag of some $230-million on the development of Ntaka Hill prject, to deliver yearly production of between 10 000 t and 15 000 t of nickel.

The earn-in period between IMX and MMG would stretch over five years and would be structured over three stages.

In the first stage, MMG would sole-fund some $10-million on exploration over the next 12 months, to earn its first 15% stake in the joint venture (JV).

MMG could then elect to sole-fund a further $25-million within a further 18-month period, to increase its JV interest to 40%.

Over the Stage 3 earn-in, MMG could elect to sole-fund a further $25-million within a further 30 months, increasing its stake in the JV to 60%.

MMG would become the manager of the JV and would initially focus on deep drilling at the Ntaka Hill prospect, while accelerating assessment of the regional setting.

IMX MD Neil Meadows said on Friday that the Stage 1 expenditure and 15% earn-in implied a pre-money valuation of some A$61-million for the Nachingwea project, which was a substantial premium to the company’s own value calculation on the project.

“We are delighted to welcome MMG as our partner to test for deeper, high-grade mafic intrusive style nickel mineralisation at Ntaka Hill, and to build on our success to date,” said Meadows.

He noted that the deeper exploration programme would lend itself to a partnership with a larger company like MMG to manage the higher cost of the programme, but also to bring to bear additional technical capability.

“If successful, the programme will deliver significant returns to IMX that simply would not have been possible for IMX to achieve alone, particularly in the current fundraising environment for junior mining companies.”

The agreement also left room for ASX- and TSX-listed IMX to mange smaller-scale exploration work on the regional tenements, so long as the work did not conflict with MMG’s sole-funded programme.

Meadows said that the agreement with MMG would ensure a well-funded exploration programme to provide a path towards production, should it prove successful.

“Importantly, the expanded exploration programme can be progressed without the need for a highly dilutive corporate level capital raising. This protects the interest of our shareholders, while ensuring they retain a substantial interest in Nachingwea.”