01/07/2008 - 10:28

Aragon buys phosphate company for $2.7m

01/07/2008 - 10:28

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East Perth-based explorer Aragon Resources Ltd has entered into the phosphate game, acquiring Territory Phosphate Pty Ltd for an initial figure of $2.7 million in scrip.

East Perth-based explorer Aragon Resources Ltd has entered into the phosphate game, acquiring Territory Phosphate Pty Ltd for an initial figure of $2.7 million in scrip.

The deal is subject to shareholder approval but if all goes ahead, Aragon will shortly hold exploration titles and applications which cover the Ammaroo and Lady Judith phosphate prospects in the Northern Territory.

Under the agreement Aragon will acquire 100 of the issue capital of Territory for a consideration of 10 million fully paid ordinary shares and 10 million options, exercisable at 25c each on or before the September 30, 2010.

Additionally Aragon has agreed to pay a royalty of $1 per tonne on ore mined, treated and sold from the tenements to the vendors.

Below is the full announcement:

Aragon Resources (ASX:AAG) is pleased to announce that subject to shareholder approval it has entered into an agreement to acquire all the shares and interests in Territory Phosphate Pty Ltd ("Territory").

The key assets of Territory are exploration titles and applications which cover the Ammaroo and Lady Judith Phosphate Prospects in the southern Georgina Basin and western Wiso Basin, NT.

Ammaroo Phosphate Prospect

The granted exploration licenses, EL25183, EL25184 and EL25185 are located 280km north east of Alice Springs in the southern Georgina Basin, Northern Territory and total 3,765 km.

The tenements cover the shelf facies phosphate beds in the lower Cambrian Sea that border the Proterozoic Davenport Inlier. Substantive phosphatic sediments extend in a belt around the periphery of the Georgina Basin and are hosted in Lower to Middle Cambrian marine carbonate and clastic sediments including mudstones, claystones and limestone. These were deposited in a near shore environment. Aragon believes that the phosphorite within the titles have excellent potential for discovery of a significant Phosphate deposit.

Phosphate mineralisation was discovered at Ammaroo in 1968 during exploration by Vam Ltd. In more recent times, NT Govt. diamond drilling and water bore drilling in 2005 have further confirmed the phosphorite occurrences.
Drill hole RM13015 at Ooratippra (within EL25185) was drilled as a water bore and intersected 45 meters @ 6.7% P2O5, including 12m @ 12.8% (3m composite samples) within a sequence of phosphoritic chert, clay, sandstone and limestone.

A diamond hole Elkedra 3 (also within EL25185) intersected 4m @ 9.16% P2O5 (2m composite samples) within the same rock unit. These drill holes, located approximately 20km apart, and the general lack of drilling in the area adds to the potential for a significant phosphate discovery.

Lady Judith Phosphate Prospect

Application ELA24994 is located approximately 280km west of the Alice Springs - Darwin railway line on the western edge of the Wiso Basin. Phosphate assays of up to 31% P2O5 over 6 meters have been reported. Also water bore RN020989 located within the tenement has yielded and assay of 28.2% over 3 meters from a depth of 15
meters and another interval of 2.2% from 72 to 75 meters. The phosphatic intersection is in the Hooker Formation within mudstone and silty limestone.

Key Terms of Agreement

Under the agreement, Aragon will acquire 100% of the issue capital of Territory Phosphate Pty Ltd for a consideration of 10 million fully paid ordinary shares and 10.0 million options over fully paid ordinary shares (convertible at $0.25 on or before 30th September 2010) in Aragon Resources Ltd.

Aragon will seek shareholder approval for the transaction at a General Meeting of shareholders to be held in due course.

Subject to shareholder approval, Aragon will allot 7.5 million of the shares and 7.5 million of the options to the vendors as compensation for the three granted titles at the Ammaroo Phosphate Prospect.

When the title covering the Lady Judith Phosphate Prospect is granted, Aragon will allot the final consideration.

In addition Aragon has agreed that the vendors will retain a small interest in the titles by virtues of a royalty entitlement of $1.00 per tonne on ore mined and treated and sold from the Tenements.

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