Helix Resources (ASX:HLX) has entered into an earn-in joint venture agreement with Legacy Minerals (ASX:LGM) to conduct exploration on the Central Cobar Project in New South Wales.
Both companies signed a binding letter agreement, setting out the staged earn-in and joint venture terms.
The Central Cobar Project is considered prospective for gold, copper, silver, and base metals, covering 308km2 in the established Cobar mining region.
Under the agreement, Helix, which has a market capitalisation of $6.52 million, can spend $2.8 million to earn an 80% interest on the project, in three separate stages.
The minimum commitments include geophysics and 700m of drilling within 12 months.
At each stage, Legacy Minerals has the option to contribute or dilute, and if chosen to dilute its interest, it will drop below 10% and will convert to a 2% gold net smelter royalty (NSR) or a 1.2% NSR if base metals are found to be dominant.
Managing Director Kylie Prendergast says the agreement provides Helix with an exploration opportunity which lies close to operating gold and copper mines, and has the potential to uncover Cobar-type mineralisation with several potential targets.
“We are pleased that Legacy has agreed this opportunity and recognised the local expertise that Helix can contribute here,” Prendergast says.
“We look forward to working with Legacy to hopefully make a new discovery on this underexplored piece of ground.”
Helix is currently in the process of planning ground geophysical surveys over up to three of the highest priority targets.
Concurrently, drill planning will be carried out and begin as soon as possible, subject to weather and contractor availability.
The company notes multiple other targets have been generated by Legacy Minerals, which will be systematically evaluated by Helix via fieldwork, auger geochemical sampling, and geophysics.
Legacy Minerals CEO Christopher Byrne says the project is strategically located and has a large untested ground package with geological prospectivity.
“The Helix Resources team has extensive knowledge and experience in the Cobar region. Their long-term commitment to the district gives them an edge in the search for Cobar-type deposits and operational efficiencies, and we believe they are the right partner to take the project forward.
“This agreement will focus on unlocking the Cobar Project’s potential while allowing Legacy to remain focused on the discovery opportunities at our 100%-owned projects — Drake, Black Range, and Thomson.”
Legacy Minerals’ Central Cobar Project’s targets complement Helix’s existing exploration portfolio and provide exposure to additional Cobar-style copper, gold, and base metal prospectivity, as well as bringing several undrilled targets that can be quickly moved through to drilling.
Helix Resources is a copper-focused explorer that holds a sizable ground position, covering 3,300km2, which is largely untested despite being located proximal to “significant” copper and gold producing operations.
Write to Aaliyah Rogan at Mining.com.au
Images: Helix Resources
