Hammer Metals (ASX:HMX) has defined a high-priority soil anomaly on the Mount Isa Fault setting within the Isa Valley Project in Queensland.
As a result, South32 (ASX:S32) has decided to proceed to the second stage of the earn-in agreement which includes a 900m drilling program.
Hammer Metals, which has a market capitalisation of $31.95 million, says the program, which will test the prospectivity of the soil anomaly, will be conducted next year.
Earlier this year, Hammer Metals and South32 executed an earn-in agreement to earn an 80% interest in the Isa Valley Project which spans 320km2 of Hammer’s broader 2,800km2 Mount Isa Project.
If South32 decides to proceed beyond stage two, the company will fund $3 million in exploration expenditure within three years to earn a 70% interest in the Isa Valley Project.
Once completed, both companies will form an unincorporated joint venture, in which South32 may elect to sole fund a Prefeasibility Study to earn an additional 10% interest in the project.
Managing Director Daniel Thomas says the early completion of the project supports the geological concept that was envisaged in the agreement.
“It’s exciting to see the emergence of a coincident geophysical and geochemical anomaly on the highly prospective Mount Isa Fault setting,” Thomas says.
“We look forward to South32 continuing to develop the exploration targets on this tenure and look forward to potential drill tests of these prospective areas in the first half of 2025.”
South32 has completed an ionic leach soil sampling program which highlights anomalous zinc with moderate linear relationships with silver, lead, arsenic, and cadmium.
The Isa Valley Project is located in an analogous geological setting to the Mt Isa deposit and is considered prospective for Mount Isa-style sedimentary lead-zinc-copper mineralisation similar in style to the Mount Isa and George Fisher-Hilton deposits.
South32 is a diversified mining and metals company focused on producing several commodities including alumina, aluminium, bauxite, copper, lead, manganese, nickel, silver, and zinc in Australia, Southern Africa, and South America.
Hammer Metals is a precious and critical metals-focused explorer with assets in Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: Hammer Metals
