Metal Hawk adds a rare earths string to its bow as IGO maintains exposure
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Metal Hawk will move quickly to test the rare earths potential of its Fraser South project in the Albany-Fraser Orogen after doing a scrip deal with IGO to reclaim 100% of the asset and another two projects in Western Australia.
Along with the Emu Lake and Kanowna East projects in the WA goldfields, Fraser South had been subject to a joint venture agreement between Metal Hawk and IGO, under which IGO had earned a 51% interest in all three assets.
Metal Hawk (ASX:MHK) announced today it would buy back the 51% interest in exchange for two million Metal Hawk shares, two million Metal Hawk options and rights associated with offtake and tenement ownership.
The transaction will see IGO’s interest in Metal Hawk increase from 5.4% to 8.2%.
Among the first items on the agenda following the ownership restructure is a maiden drilling program at Fraser South testing not only for Nova-Bollinger-style nickel-copper sulphides but also rare earth elements.
The rare earths potential of the region has come to the fore in recent months with the emergence of OD6 Metals’ Splinter Rocks discovery, West Cobar Metals acquiring the Salazar project and several other companies making good progress with their respective assets.
Metal Hawk’s drilling at Fraser South will pick up right where IGO left off, with the miner completing a significant amount of quality work since executing the earn-in and JV agreement in September 2020.
“The Fraser South project covers over 40km of strike along the interpreted structural extension of the western margin of the Albany Fraser belt,” Metal Hawk managing director Will Belbin said.
“The project is positioned within a rapidly emerging REE region highlighted by a number of exciting new clay-hosted discoveries along strike and immediately south of Metal Hawk’s 987km2 tenement area.
“The Kanowna East and Emu Lake projects present as outstanding greenfields gold and nickel opportunities close to Kalgoorlie, and the company is planning its next steps towards continued exploration on these projects.”
Under the planned work program, which was originally designed by IGO’s exploration team, Metal Hawk plans to kick off an extensive aircore drill program at Fraser South in the current quarter.
This will target nickel-copper mineralisation hosted within zones of potential mafic and ultramafic stratigraphy along the western margin of the interpreted structural extension of the Albany Fraser metamorphic belt which hosts the world-class Nova-Bollinger nickel mine.
Drilling will also test for clay-hosted rare earths mineralisation within the weathered zone above the regionally extensive REE-enriched Booanya Granite.
Work will focus initially on the southern tenements E63/3809 and E36/1936, which are located immediately north and along strike from OD6’s Splinter Rock and just 10km from the Newmont deposit with West Cobar’s Salazar project.
Recent drilling at these third-party projects has uncovered extensive, shallow clay-hosted REE mineralisation across several prospect areas.
While IGO has stepped back from the three projects, Metal Hawk’s payment of 2 million shares and 2 million options – taking IGO’s interest in MHK up from 5.4% to 8.2% – ensures that the miner will retain exposure to any upside.
IGO has been granted the Right of First Offer to purchase any ore or concentrate containing nickel group and lithium group minerals produced from the project tenements as well as right to match any third-party offtake agreement in respect of ores and concentrates of the same minerals.
It also has the right to pre-empt the company assigning its entire interest in one or more of the project tenements.
The 103km2 Kanowna East project is relatively unexplored despite its proximity to Kalgoorlie and significant gold and nickel sulphide deposits.
Prior to the company’s September 2021 discovery of nickel sulphides at its Berehaven project to the south, drilling had returned outstanding gold intercepts including 4m at 17.8 grams per tonne (g/t) gold from 75m and 4m at 7.11g/t gold from 55m.
Emu Lake is just 75km from Kalgoorlie within the Gindalbie greenstone belt.
Notably, the southern part of the project area lies along strike and less than 6km from Ardea Resources’ Binti Binti nickel gossan deposit and the recent high-grade nickel sulphide discovery at Binti South.
Following a complete review of acquired geological information from IGO, Metal Hawk will consider its options to continue exploration, strategically divest or joint venture its interest in the Kanowna East and Emu Lake projects, whilst also continuing nickel sulphide and gold exploration activities at the Berehaven Project located 20km east of Kalgoorlie.
This article was developed in collaboration with Metal Hawk, 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.