PERTH (miningweekly.com) – ASX-listed junior Magmatic Resources has struck a deal with fellow-listed Montezuma Mining Company to acquire the Mt Venn copper/nickel/cobalt project, in Western Australia.
Under the terms of the agreement, Magmatic will pay A$250 000 in cash and a A$425 000 in ordinary shares. Should the company define a mineral resource of more than 20-million tonnes, grading at about 1% copper equivalent, Magmatic will pay a further A$350 000 in cash and A$350 000 in shares.
Furthermore, should the junior make a decision to mine, Montezuma will receive a further A$350 000 payment in cash and a further A$350 000 in Magmatic shares.
Montezuma will retain a 2% net smelter royalty on any product produced at the Mt Venn operation.
Magmatic has been granted a buyback option over the net smelter royalty which can be exercised at any time, in return for A$5-million in cash.
Under the terms of the agreement, Magmatic has to spend a minimum of A$500 000 on the project area within the first 18 months following the acquisition.
“We are all very excited about the Mt Venn copper/nickel/cobalt project acquisition," Magmatic MD David Richardson said on Wedneday.
“The project complements our existing portfolio of gold and base metals project in the East Lachlan. The opportunity to explore the Mt Venn intrusion, especially having secured over 60% of the complex, gives Magmatic immediate access to what is considered one of the best areas in Australia to explore for copper, nickel and cobalt.”