PERTH (miningweekly.com) – Mining giant BHP Billiton has withdrawn from a farm-in agreement with junior St George Mining over seven tenements in Western Australia.
BHP entered into the agreement in 2011, agreeing to earn a 51% interest in the nickel rights over the East Laverton property. The mining major had been required to spend some A$600 000 over the two-year option period, and to spend some A$3-million over a three-year period, to earn its interest.
St George said on Thursday that BHP would now be required to make a cash payment to satisfy its obligation under the farm-in agreement and thereby maintain the tenements.
Following the reinstatement of its full ownership over the nickel rights at the East Laverton property, St George said it had developed a new nickel explorations strategy.
Executive chairperson John Prineas pointed out that exploration work done under the farm-in was successful in identifying primary nickel sulphide mineralisation at the East Laverton property, and confirmed St George’s belief in the potential of the tenement holdings.
“Project Dragon was an excellent means to advance through the initial high-risk stage of nickel exploration at East Laverton. St George will now move forward on the solid foundation built from almost A$3-million of exploration work funded and conducted by a major mining company,” Prineas said.
He noted that the exploration zones formally covered by the farm-in would now be incorporated into St George’s ongoing exploration programme, which would maximise the potential for exploration success while improving cost management.
St George’s technical team was reviewing the exploration data from the Project Dragon farm-in and integrating it into the company’s own exploration database.
Selected priority targets would be fast-tracked, and Prineas said that the company was planning a significant amount of fieldwork for the remainder of the calendar year.