Canadian explorer Inflection Resources (CSE:AUCU) has struck a $135 million exploration deal with AngloGold Ashanti (ASX:AGG) over a string of projects in New South Wales — right next door to Kincora Copper’s (ASX:KCC) Macquarie Arc assets.
Kincora says the Inflection-AngloGold agreement is a ‘favourable development’ for its own projects on multiple fronts.
Speaking to Mining.com.au, Kincora Copper President and Chief Executive Officer (CEO) Sam Spring says this deal provides technical endorsement to the company’s strategy in this part of the Macquarie Arc belt.
He says Kincora was an early entrant into the region, pegging the ‘most prospective’ shallow-to-moderate sections of the belt before Australian iron ore producer Fortescue Metals Group (ASX:FMG) and Inflection consolidated the remaining ground.
“The northern covered section of the Macquarie Arc offers clear Cadia-scale targets. It is absolutely mystifying why so little exploration has been carried out to date in this region, so credit to AngloGold Ashanti for recognising this with the transaction with Inflection. The undercover part of this belt is a major opportunity with huge upside.
“It is absolutely mystifying why so little exploration has been carried out to date in this region”
We look forward to seeing the results of drilling at Inflection’s Duck Creek prospect, located within 2.5km of our Nyngan Project boundary, with 2 rigs commencing this week, as we shortly drill our highly prospective Nevertire Project that we feel is a real standout target and supported by a cooperative funding grant from the NSW government.”
While Kincora says Inflection has been the first group to undertake drilling campaigns within the northern Junee-Narromine belt, the company believes its Nevertire Project is shallower, with a larger target area, and more compelling geological vectors.
Additionally, Kincora says the Northern Macquarie Arc compares favourably to other current global exploration hotspots for porphyry exploration, including the Golden Triangle in Canada, the Vicuna district in Argentina and Chile, and the Northern Andean Belt.
Under the deal with Inflection, AngloGold will provide up to $10 million of exploration expenditure across a portfolio of projects as part of a phase one exploration program. This program will drill test a wide range of large, intrusive-related copper-gold targets, including the Duck Creek Project. Phase one also includes a minimum expenditure commitment of $6 million and a 10% management fee payable to Inflection.
Meanwhile, phases two and three of the agreement are staged earn-ins under which AngloGold may select up to 5 designated projects in which it can earn a 65% interest by funding $27 million in exploration expenditures on each designated project for a cumulative maximum expenditure of $135 million.
AngloGold also retains a further right under phase four to earn an additional 10% interest in each designated project by sole-funding a Prefeasibility Study (PFS) based on a minimum of 2 million ounces of gold or gold-copper equivalent measured and indicated resources.
Subject to existing underlying royalties, Inflection will be granted a 2% or 1% net smelter royalty (NSR). Additionally, Inflection estimates the phase one exploration program will consist of about 30,000m of drilling with 2 initial drill rigs.
The company intends to start drilling in the coming days, with an initial focus on completing deep drillholes at the Duck Creek project.
Commenting on the agreement, Inflection CEO and President Alistair Waddell says: “The execution of this agreement with AngloGold sets the foundation for the upcoming exploration program and provides the necessary capital to aggressively drill test and potentially develop our large portfolio of copper-gold porphyry targets within the northern extension of the Macquarie Arc.
We very much look forward to working with our partners AngloGold to explore the portfolio of targets over the coming years.”
This sentiment is shared by AngloGold, with its SVP Greenfield Exploration Philip Newton saying the company is excited to partner with Inflection for this opportunity in a proven tier-one terrane and to contribute towards a promising project in Australia.
“The complementary skills of AngloGold and Inflection can accelerate the discovery process in a sustainable manner that benefits all stakeholders.”
“The complementary skills of AngloGold and Inflection can accelerate the discovery process in a sustainable manner that benefits all stakeholders”
Kincora Copper is an ASX-listed explorer focused on becoming Australia’s ‘leading’ pure-play porphyry explorer in the country’s foremost porphyry belt.
The company holds a portfolio of copper-gold assets in New South Wales, including the Trundle, Fairholme, Condobolin, and Northern Junee-Narromine Belt projects, as well as the Southern Gobi Belt Project in Mongolia.
Inflection Resources is a Canadian copper-gold exploration company with a portfolio of projects with AngloGold in New South Wales and the Carron Project in Queensland.
AngloGold Ashanti is an ASX-listed global miner focused on its portfolio of operations, projects, and exploration activities across 9 countries spanning 4 continents.
Write to Harry Mulholland at Mining.com.au
Images: Kincora Copper Ltd