S2 Resources (ASX:S2R) has reached an agreement with privately held company Oxley Resources to earn a 70% interest in the Warraweena Project in New South Wales.
Under the agreement, S2, which has a market capitalisation of $67.66 million, will issue Oxley 590,000 ordinary shares on signing, representing a consideration of $100,000 at an issue price of $0.17 per share.
S2 has agreed to spend $2.7 million by the end of July 2027 to earn the 70% participating interest. This includes a minimum expenditure of $270,000 expenditure by the end of July 2024 as well as $350,000 by the end of December 2024.
At least $750,000 of the overall earn-in spend is to be spent on drilling, according to S2.
At the earn-in point, a joint venture (JV) will be formed between both companies and Oxley will have a one-time choice to retain its 30% interest or to convert this to a 15% carried interest.
In the circumstance of a carried interest, S2 will have an 85% interest and Oxley will have 15% interest, which will be funded by S2 up to the start of commercial production.
S2 Resources Executive Chairman Mark Bennett says this acquisition is part of the company’s ongoing process of maintaining a diversified pipeline of opportunities by uncovering and exploring potentially ‘high impact’ targets in underexplored areas.
The company recently identified an ‘outstanding’ target area on the presence of coincident distinct, unexplained gravity and magnetic anomalies.
According to S2, this area also contains the most anomalous combined nickel, copper, and zinc heavy mineral concentrate sample in Australia.
Bennett says the single anomalous laterite sample collected by the Gelogical Survey of Western Australia led to the discovery of its Nova-Bollinger deposit in the Fraser Range.
“At this stage it would be premature to attempt to second guess the style and range of deposit styles that might be associated with this cocktail of features, but the empirical evidence is too compelling to ignore. We look forward to working with Oxley to answer these questions.
“At this stage it would be premature to attempt to second guess the style and range of deposit styles that might be associated with this cocktail of features, but the empirical evidence is too compelling to ignore. We look forward to working with Oxley to answer these questions“
These are usually underexplored because they are unconventional plays or not in well understood areas, but many of more significant discoveries are those that are the first in a particular area or the first of a particular style“
The Warrawenna project covers a 932km-square area and extends 75km northeast from Bourke in northern New South Wales.
S2 Resources is an ASX-listed gold and base metals in politically stable jurisdictions such as Australia and Europe.
As of 30 September 2023, the company had $4.440 million cash and cash equivalents at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: iStock
