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The $60 million Citadel deal between Antipa and Rio Tinto is one of the biggest of its kind between a major mining company and a junior, writes Barry FitzGerald in his Garimpeiro column.

Exploration boffins at mining giant Rio Tinto reckon Australia is overdue another world-class metals discovery.

And one of the areas it has selected as having the potential to serve up the next big one is in Western Australia’s Paterson province.

The region’s ancient rocks are already home to Newcrest’s big Telfer gold-copper deposit and a number of other sizeable mineral deposits.

But because the region is remote (400 km south-east of Port Hedland in the Pilbara), and because of the extensive cover hiding much of the prospective rocks, it is a region that remains lightly explored.

Rio set out to change that in 2015, striking a deal with Paterson province exploration specialist Antipa Minerals (ASX:AZY) to explore its Citadel gold-copper-silver-tungsten project area, about 80 km north of Telfer.

The $60 million headline value of the farm-in deal, under which Rio can earn a 75 per cent interest, remains one of the biggest deals of its type between a major mining company and a junior like Antipa.

But it has to be remembered that Rio has rights to withdraw from the exploration joint at various points along the way.

Still, the deal with Rio, with all of its technical nous and successful track record in uncovering big deposits around the globe, is all a company the size of Antipa (trading at 2.3c for a market value of $31 million) could have asked for.

In a real boon for Antipa, Rio Tinto elected to proceed to the second stage of the farm-in agreement in April.

The second stage requires Rio to spend $8m on exploration within the next three years to take its interest in Citadel to 51 per cent. It followed on from the first stage during which Rio spent $3m over 18 months refining drill targets.

Rio also elected to become operator of project. It goes without saying that should it continue to receive enough encouragement to spend the full $60m to get to a 75  per cent interest, Citadel would have become something special.

Sure Antipa will have been reduced to a 25 per cent stake. But there is nothing wrong with a company of Antipa’s current size owning a 25 per cent stake (the deal envisages it could earn its way back to a 35 per cent stake) in something special.

The 2017 exploration program at Citadel got going in June and includes all of the gee-whizz remote sensing technology that Rio can bring to the exploration hunt. It is all about zeroing in on the best drill targets.

Watch out for drill results from the Blue Steel and the Sundance prospects from the area which is already home to the Calibre and Magnum deposits worked up by Antipa and which have development potential in their own right.

The inferred mineral resource estimate across the two deposits stands at 1.2m oz of gold and 139,000 tonnes of copper, with the mineralisation open in all directions.

Their development chances would benefit from the delineation of higher grade zones.

As exciting as the Citadel joint venture is, Antipa has not got all its eggs in the one basket. Just 40kms north of Telfer, Antipa has kept 100 per cent of the high-grade gold with copper found at the Minyari/WACA deposits.

The company’s drilling program this year has the aim of upgrading their resource classification which will be fed in to a scoping study which will examine the potential for a mine development. There was encouragement on that front in June when drilling at the WACA deposit returned a best result of 42m grading 7.8 grams of gold a tonne from 262m downhole.

And closer to Telfer again, Antipa is planning to drill its Tim’s Dome South prospect , with the aim being to follow up high-grade gold mineralisation opportunities along a 3.4 km long zone of interest.