$3.8bn miner IGO is seeing something it likes at Buxton’s massive frontier nickel-copper project
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Independence Group (ASX:IGO) has clearly seen something to excite them at the West Kimberley joint venture with explorer Buxton Resources (ASX:BUX).
It is early days, but Buxton might have stumbled onto a major new nickel and copper province when it made a grassroots discovery at the Merlin prospect in 2018.
Initial drilling returned high grade hits of up to 8.14 per cent nickel, 5.26 per cent copper and 0.69 per cent cobalt.
That caught the eye of $3.77 billion-dollar miner IGO (amongst others), which led to the formation of two project joint ventures in late 2018 – aimed at fast tracking exploration and potential development.
The deals meant IGO could earn up to 70 per cent of the projects by paying for everything, right up until completion of a project feasibility study.
Today, Buxton told investors that IGO will take over project management with “exploration to be accelerated substantially”.
They’ve struck a new JV deal over the project – Buxton still won’t need to pay anything at all until a feasibility study is completed, but all remaining West Kimberly tenure will be moved into the JV.
Plus, Buxton gets a handy $1.27 million from IGO for some additional tenements and Kimberley based field equipment.
It’s a fantastic deal for Buxton shareholders. This is an early stage project, so feasibility studies are a long way, and many millions of dollars, away.
“IGO has already spent more than anything Buxton could have sensibly raised for work on our ground in the West Kimberley or the Fraser Range,” Buxton managing director Eamon Hannon says.
“These binding deals mean that exploration will be accelerated still further, while also freeing Buxton from any ongoing financial or management commitments.
“Buxton has reduced operational expenses to a drip, has ample cash at bank, a solid share structure and has two multi-billion-dollar corner stone investors owning a combined 23 per cent of our register.
Buxton will use its $6m cash balance to pursue other project opportunities, Hannon says.
“Buxton will now be actively looking for the company’s next frontier, re-applying the formula which has been so successful for us in the West Kimberley since 2015.”