New Frontier Minerals (ASX:NFM) has entered into a memorandum of understanding with Austral Resources (ASX:AR1) to establish a strategic alliance across the Mt Isa copper belt in Queensland.
In turn, this alliance can work towards realising the full exploration and mining potential of an enlarged asset base.
To achieve this outcome, both companies plan to work collaboratively on formalising a processing agreement whereby New Frontier will supply copper ore from its Big One deposit within the NWQ Copper Project and Austral will process ore at the Mt Kelly facility if it meets necessary input grade criteria and adds value.
New Frontier will also seek necessary approvals to have a 11,000 tonnes stock pile at Big One undergo metallurgical testwork through Mt Kelly.
Both companies will negotiate a profit-sharing formula that is mutually beneficial.
New Frontier Chairman Ged Hall says this outcome provides a potential path to production for copper ore from satellite deposits across the NWQ Copper Project.
“The NFM team looks forward to working closely with counterparts at Austral Resources to maximise the exploration and mining potential from this strategic alliance,” Hall says.
Austral Chairman David Newling says the agreement demonstrates that the company has assets that are attractive to third parties, and the company would welcome others to the table as well.
“The Mt Isa region is primed for consolidation in the copper industry and Austral remains focused on these opportunities where it has the potential to add significant value,” Newling says.
Under the agreement, New Frontier will be responsible for applying for a mining lease over Big One, seeking permission to begin trial mining and processing the existing copper oxide stock piles, and securing a landowner agreement.
The company will also be responsible for conducting drilling campaigns to expand Big One’s resource and starting exploring other prospective targets within the NWQ Project.
Meanwhile, Austral will support facilitating the metallurgical testwork to ensure copper ore satisfies the input criteria to be processed at Mt Kelly, and provide supporting information to assist New Frontier with a mining lease application.
New Frontier Minerals is an Australia-based explorer focused on developing multi-commodity assets that show future potential as an economic mining operation.
Austral Resources is a copper producer operating in Queensland Gulf Country.
Write to Aaliyah Rogan at Mining.com.au
Images: Austral Resources
