PERTH (miningweekly.com) − ASX-listed Vital Metals has entered into a farm-in agreement with the Japan Oil, Gas and Metals National Corporation (Jogmec) over its Watershed tungsten project, in Queensland.
Jogmec could earn a 30% interest in the project, by spending A$5,4-million over two years, to fund the completion of a bankable feasibility study for the project.
“This has the potential to be a defining agreement in the history of the Watershed project,” said Vital chairperson David Macoboy.
Should the agreement proceed, Jogmec would make the first A$5,4-million payment in a series of installments over the earn-in period, including an initial payment of A$800 000 by the end of September.
“Our ability to attract such a credible partner reinforces our own confidence in the value of this project, particularly against the backdrop of reduced global supply and rising tungsten prices.”
Mocoboy described Watershed as a highly prospective tungsten project, with a Joint Ore Reserves Committee-compliant indicated resource of 15,3-million tons, grading 0,46% tungsten oxide and with a prefeasibility study previously completed.
“Importantly, Chinese export restrictions have given rise to a marked increase in the price of tungsten with the status quo unlikely to change significantly in the near term,” Mocoboy added.
Vital would continue as the operator of the Watershed project on behalf of the joint venture and has now advanced the project to bankable feasibility stage.