PERTH (miningweekly.com) – ASX-listed Metro Mining has signed a farm-in agreement with PanAust over its Mahar San exploration project, in Myanmar.
Under the agreement PanAust will have the exclusive option to explore the project for one year, in exchange for funding all operating costs, including an agreed drilling programme.
The company could then acquire a 63.75% interest in the project area by spending $3-million, as well as reimbursing Metro $500 000 for historical costs. The joint venture partner could gain a further 18.75% interest in the project area for a further $5-million exploration expenditure.
Furthermore, PanAust will have the option to purchase Metro’s remaining shares in the project for $9.5-million. If the option is not exercised, Metro could elect to either contribute to its share of the project expenditure or convert its interest into a 2% net smelter royalty over production.
Metro chairperson Stephen Everett said on Thursday that the farm-in of the Myanmar exploration interest would allow Metro to remain focused on the development of its bauxite resources in Cape York, following the takeover of Gulf Alumina, while retaining an interest in the upside to be realised from successful exploration of Mahar San.
“PanAust brings a wealth of experience in developing and operating projects in South East Asia, and we look forward to a rewarding relationship,” Everett said.
The Mahar San project comprises three small mining concessions and an enveloping larger copper exploration concession covering 1 988 acres. Small-scale gold and copper mining has been intermittently carried out in three small openpits since 2010, but gold mining ceased in 2013. The mining of deeper copper sulphide mineralisation was also started, with some copper metal produced from small leach pads.