Mineral explorer Strategic Energy Resources (ASX:SER) has executed a farm-in and joint venture (JV) agreement with Fortescue Metals Group (ASX:FMG) subsidiary FMG Resources over the Canobie Project in northwest Queensland.
Under the agreement, FMG Resources will be able to earn a 51% interest in Canobie by spending $4 million on exploration, which includes a minimum of 3,000m of basement drilling, within 3 years. This also includes a minimum obligation of $2.5 million in exploration expenditure within the first 2 years of the deal.
During the stage one farm-in period, Strategic Energy Resources will operate and conduct all exploration activities under the direction of an exploration committee that will comprise 2 members from each party.
FMG Resources may then earn an additional 29% interest by spending a further $4 million on exploration over an additional 3 years, which will include a minimum of 3,000m of basement drilling.
The agreement also stipulates that co-contribution to expenditure may occur after FMG Resources earns its stage one or two interest. If Strategic Energy Resources chooses not to contribute, its JV interest will be diluted in line with an industry formula.
The Canobie Project covers 1,800km-square of the Mt Isa Eastern Succession and is considered ‘highly prospective’ for iron oxide copper-gold (IOCG) and magmatic nickel sulphide.
Commenting on the JV agreement, Strategic Energy Resources Managing Director David DeTata says: “We are excited to partner with Fortescue in the search for copper and nickel across the Canobie Project.
“together we are now able to systematically test multiple drill targets within the project”
SER has already demonstrated the potential for IOCG and magmatic nickel at Canobie, and with Fortescue’s support, together we are now able to systematically test multiple drill targets within the project.
Furthermore, appointing SER as Operator shows strong support for SER’s ability to execute work programs and will enable SER to also benefit from Fortescue’s substantial technical and operational capability.
This partnership is aligned with our strategy of generating, de-risking, and advancing high-quality Greenfields projects through our science-driven approach to exploration and sharing risk and reward to ensure the strategy will endure.”
Strategic Energy Resources is an Australian explorer with a portfolio of projects across the country. These assets include the Isa North Project in Queensland, along with the Mundi and South Cobar projects in New South Wales.
In addition to the JV executed at Canobie, the company has another JV with FMG Resources at the Myall Creek Project in South Australia. Strategic Energy Resources also has a JV with Evolution Mining (ASX:EVN) at the Cowal Project in New South Wales.
Write to Harry Mulholland at Mining.com.au
Images: Strategic Energy Resources Ltd
