Shares in Subiaco-based Strategic Minerals Corporation NL were down 10 per cent at close of trade after Oxiana Ltd announced it would not proceed to the second stage of a farm-in agreement over the Woolgar uranium project in Queensland.
The full text of a Strategic Minerals announcement is pasted below
The Company advises that it has received notification from Oxiana Ltd that it will not be exercising its option to proceed with the second stage of the Woolgar farm in agreement in 2008.
Oxiana completed a total of 7 holes in 2007 for a total of 2831 metres down hole depth, to test several targets in the Sandy Creek area, aimed at identifying deep structures in part of the epithermal vein system, with the potential to produce a 3 million ounce ore body at depth.
Numerous deep and shallow targets within the Sandy Creek epithermal system are yet to be tested.
Additional targets in the Woolgar project regional areas identified by Oxiana's soil sampling, and previous mapping and drilling by Strategic will be a primary focus of Strategic next phase of exploration drilling.
Oxiana have expended a minimum of $2 million since entering into the Woolgar farm in agreement, however, have not earned any interest in the Woolgar project.
The work carried out by Oxiana will be of significant value to Strategic in designing and conducting future exploration programs at Woolgar.
The withdrawal by Oxiana from the farm in agreement will allow Strategic to regain full unencumbered 100% ownership and management of the Woolgar project and resume exploration and drilling programs centred on the development of a near surface gold resource, which will commence after the wet season next year.
Strategic has now regained the capacity to plan and implement future exploration programs in its own right designed to accelerate its objective of becoming a gold producer at Woolgar. Current gold resources developed by Strategic to date at Woolgar totals around 450,000 ounces.