PERTH (miningweekly.com) – Explorer Metals X has taken full ownership of the Mount Davies joint venture (JV) in South Australia, acquiring the outstanding 49% interest from the exploration arm of major Rio Tinto.

The tenement was previously the subject of a farm-in agreement with Rio, in which Metals X was earning a 51% interest.

The agreement required a minimum expenditure of A$500 000 within the first two years, and a further A$2-million within four years, if Metals X subsidiary Austral Nickel wished to earn the 51% stake.

The tenement hosted part of the Claude Hill deposit, which consists of an inferred resource of 33.3-million tonnes, grading 0.81% nickel and 0.07% cobalt. The Claude Hill deposit is located some 25 km from the Wingellina deposit, which hosts a total mineral resource of 183.2-million tonnes at 0.98% nickel and 0.08% cobalt, for some 1.8-million tonnes of nickel.

“This acquisition further consolidates the foundations for the Wingellina project. For the first time in many decades, the entire Wingellina layered intrusive has been consolidated into one entity,” said Metals X CEO Peter Cook.

He noted that despite the enormous resource that already existed at Wingellina and Claude Hills, the potential for additional resource was also significant.

“Although the current nickel price is depressed, these projects are extremely long life and of a magnitude that means they will definitely be developed at some time in the future,” Cook said.

In 2008, Metals X completed a feasibility study for the Wingellina project, which found that the project could support a 40-year mine life, with an average yearly production of 40 000 t of nickel and 3 000 t of cobalt, at a capital cost of some A$2.3-billion.

Since then, Metals X has focused on approvals to enable project development, and was currently finalising its submission for environmental approval. The company also entered into an agreement with the Native Title Holders, allowing Metals X to develop a mining operation at Wingellina.