Gold and base metals explorer Carawine Resources Limited (ASX:CWX) has entered into a Farm-In and Joint Venture Agreement with Fortescue Metals subsidiary FMG Resources Pty Ltd to explore three key tenements Carawine’s Paterson Project in Western Australia.
The Lamil Hills tenement is located within 30km of Newcrest Mining’s Telfer gold-copper mine, Trotman South is 30km to the south of the Telfer mine, while the Sunday tenement is within 5km of Metals X’s Maroochydore copper-cobalt deposit.
The three tenements are at an early exploration stage, with Carawine’s work to date comprising target generation activities based mostly on work by previous explorers.
Carawine Managing Director David Boyd said the agreement with Fortescue represents another great opportunity for the company to realise the significant potential of its Paterson Project tenements.
“With the addition of Fortescue as a partner in the Paterson we now have two major resource companies funding exploration on our Paterson tenements. This agreement gives Fortescue access to under- explored tenements over highly prospective ground” Mr Boyd said.
“This deal also ensures Carawine is well positioned to share in the benefit of any discoveries, with Fortescue well placed to support a potential development should the exploration activities be successful. We look forward to sharing the details of the exploration programs as they progress.”
The agreement with Fortescue represents a further endorsement of Carawine’s exploration targeting strategy, which has already led to the formation of active joint ventures with Rio Tinto Exploration in the Paterson province and with Independence Group NL in the Fraser Range region of WA.”
Key terms of the Agreement are:
- Fortescue will pay Carawine A$125,000 in cash within 30 days of execution of the Agreement.
- Fortescue must spend at least A$500,000 within the first 18 months of the Agreement before it can withdraw.
- Fortescue then has the right to earn a 51% interest in the tenements by spending A$1.5 million on exploration within three years.
- Once Fortescue has earned a 51% interest in the tenements, a Joint Venture will be formed.
- Fortescue may then elect to earn an additional 24% interest in the Tenements by spending an additional A$4.5 million on exploration over an additional four years during which Carawine will be free carried.
- Once Fortescue has earned the additional 24% interest in the Tenements, bringing its total interest in the Tenements to 75%.
Carawine recently entered into a farm-in and joint venture agreement with Rio Tinto Exploration Pty Limited to explore its Baton and Red Dog tenements in the western Paterson Province.
The combined terms of the Fortescue and RTX agreements represent a minimum commitment to Carawine of at least A$2 million, with the potential for up to A$11.5 million to be spent on exploration under both agreements over the next six to seven years.