PERTH (miningweekly.com) – ASX-listed junior Sheffield Resources has signed a joint venture (JV) agreement with metals producer Independence Group over four granted tenements in the Fraser Range region of Western Australia.
Under the terms of the JV, Independence will earn a 51% interest in the project area by making an up-front payment of A$500 000. The company could then earn an additional 19% interest by spending A$5-million within five years of the start of the JV.
At any time after the start of the JV, and until the completion of a prefeasibility study, Independence will have the option to purchase an additional 5% interest for A$10-million, or the equivalent of Independence shares.
Should Sheffield’s interest dilute to 5% or less, its holding in the project area will automatically convert to a 1% net smelter royalty return.
Sheffield MD Bruce McFadzean said on Wednesday that the JV was a positive outcome for the company’s shareholders.
“We are very pleased to have formed the Fraser Range JV with Independence. They are well-funded, dedicated nickel explorers and their ownership of the Nova mine underpins a long-term commitment to the region.”
McFadzean said that the JV would allow Sheffield to retain significant exposure to exploration success in the Fraser Range, should the company contribute to its 30% interest beyond the initial earn-in phase.