IGO to apply exploration expertise in $18m Impact Minerals’ Broken Hill farm-in
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Independence Group will throw its weight behind Impact Minerals’ Broken Hill nickel-copper-platinum group metals project in New South Wales as part of a farm-in deal worth up to $18 million.
Impact (ASX:IPT) announced the details of the farm-in this morning, outlining a deal which would see Independence (ASX:IGO) spend $6 million on exploration at Broken Hill over four years to earn a 51% stake in the project.
The major miner can drop a further $12 million of exploration spend over the next four years to earn up to a 75% interest in the project, after which the parties can contribute pro-rata or dilute.
Should IGO not choose to proceed with this stage, its initial stake will revert to 49%.
Impact managing director Dr Mike Jones said having recognised the huge potential of the project, it was exciting to have found a partner with technical capacity as sound as that of IGO.
“We are extremely pleased to announce this joint venture with IGO, one of Australia’s most outstanding exploration and mining companies,” he said.
“We had a number of approaches from major companies for a joint venture after our last major drill campaign at Broken Hill but chose IGO because of their technical capacity, in particular their deep penetrating EM systems capability and experience, and also the way they have approached our negotiations.
“We have established that a large amount of deep drilling will be required to further explore the exciting prospects we have generated at the project and it is appropriate that a well-funded partner with excellent credentials is brought in to help fund what could be quite significant expenditures going forward.”
The farm-in deal is exclusive to the exploration licences EL7390 and EL8234, with IPT retaining full ownership of its nine other extensive and copper-silver-zinc-lead prospective ground holdings in the area.
Minimum spend of $500,000 is required in the first year of the farm-in.
IGO has already outlined its plans for the first year of the farm-in, intending to complete ground electromagnetic geophysical surveys using a deep penetrating SQUID system over the Moorkai Trend and the Little Broken Hill Gabbro at a minimum.
At Moorkai Trend, it will be assessing a 9km-long ultramafic to mafic dyke and chonolith complex which to date is very poorly explored.
Drilling by IPT at the southern end of the trend has previously returned high grades of nickel-copper-PGMs in the Platinum Springs area in a channel-like structure at the base of the ultramafic unit.
No drilling of significance has taken place along the rest of the trend.
Impact previously completed the first ever drill program across the 7km-long Little Broken Hill Gabbro intrusion, identifying a number of areas of highly anomalous nickel, copper and/or PGMs across several kilometres of the basal unit along the way.
The company said extensive further deep drilling was required at both prospects, and IGO’s initial work would aim to identify specific EM targets which may represent high-grade massive sulphide deposits.
“There has been limited exploration for the best part of 30 years in the area and there is significant potential on this ground for the discovery of major deposits of silver-lead-zinc and particularly copper,” the company said in its release to the ASX today.
The farm-in and JV over Broken Hill allows Impact to further increase its focus on its WA projects, Arkun and Doonia.
At the Doonia gold project, the company has now secured a drill rig with all permits in place, and aims to begin drilling by late November-early December – once the rig has finished its current contract.
The target will be a 2.5km by 1km sized gold-bismuth boil geochemistry anomaly that overlies a cluster of isolated magnetic anomalies which the company says may represent targets for intrusion related gold similar to that of Lefroy Exploration’s (ASX:LEF) Burns discovery 30km to the west.
Jones said Impact was excited about the lithium, rare earth and nickel-copper-PGM potential of Arkun, where exceptional soil results were recently reported that confirmed its theory that the project was a highly prospective and vastly underexplored part of an emerging mineral province in WA’s southwest.
With IGO onboard at Broken Hill, these theories can be given greater attention. Impact intends to complete follow-up work to identify targets at Arkun for drilling in 2022.
This article was developed in collaboration with Impact Minerals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.