Ora Gold teams up with Sandfire as partner at Red Bore copper project
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Special Report: Ora Gold has attracted copper producer Sandfire Resources as its joint venture partner for the non-core Red Bore project in Western Australia.
Under the agreement, Sandfire will acquire a 75 per cent interest in the Red Bore project, leaving Ora Gold with a 15 per cent interest that is free carried until a decision to mine.
On Sandfire reaching a decision to mine, Ora Gold (ASX:OAU) has a put option to sell its stake in the 2sqkm project, which is adjacent to its new partners’ DeGrussa copper-gold mine.
If Ora decides to retain its interest, Sandfire will be required to cover Ora Gold’s share of any cash calls by way of interest free loans repayable from 75 per cent of free cash flow from its share of any minerals produced from Red Bore.
Separately, Ora Gold and Sandfire has reached a deed of settlement with William Richmond whereby Sandfire will acquire Richmond’s 10 per cent in the project in exchange for $1.25m and a 1.25 per cent net smelter royalty over minerals produced by the joint venture.
This also resolves Richmond’s claims against both companies and terminates all existing agreements between Ora Gold and Richmond.
Ora Gold first acquired a stake in Red Bore in 2010 and its exploration between 2010 and early 2012 led to the definition of an indicated resource of 48,000 tonnes grading 3.6 per cent copper and 0.4 grams per tonne (g/t) gold under the older JORC 2004 code. That code has since been superseded by the JORC 2012 code.
Subsequent drilling in 2014 tested a theory that the Red Bore gossan represented a mineralised sulphide shoot plunging to the southwest.
Two mineralised copper sulphide and magnetite occurrences were encountered including a shallow intercept of massive chalcopyrite grading 28.4% copper, 1.3g/t gold and 32.2g/t silver.
This article was developed in collaboration with Ora Gold, 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.