West Perth - based Golden State Resources Ltd has entered a joint venture with specialist iron ore explorer Polaris Metals NL, allowing Polaris to earn a 70 per cent equity in the rights to iron ore at the Golden States' Johnston Range Project.
Johnston Range covers 335 km2 of the Yilgarn Iron Province, north of Koolyanobbing and 160 km north of the Southern Cross,WA.
Golden State retains 100 per cent equity in project minerals other than iron ore, and continues to actively explore at Johnston Range for gold, nickel and copper. Golden State and Polaris will co-operate in their activities to enable the most efficient exploration effort for their respective commodities.
Polaris's exploration in the area is targeting a resource base sufficient for export of 2½ million tonnes per year of iron ore. A mining operation would utilise the established rail link from Koolyanobbing to Kwinana.
Polaris will commence earning its 70 per cent interest when the authorisation of the Minister for State Development is in hand for exploration on the tenements to include iron ore and is normally completed in 1-2 months. Polaris is then committed to the expenditure of not less than $75,000 on the tenements within 12 months.
Polaris may earn its initial interest by sole funding iron ore exploration through to the completion of an economic pre-feasibility study and JORC-compliant resource, or expending $1,000,000, whichever is the greater.
At Golden State's option, Polaris may earn a further 10 per cent interest by sole funding the cost of completion of a bankable feasibility study or the expenditure of an additional $1,000,000 on the tenements, whichever is the greater. Should Polaris reach an 80 per cent interest, Golden State may elect to contribute or to be diluted pro rata; and should Polaris reach a 90 per cent interest Golden State may elect to exchange its 10 per cent interest for a 2.5 per cent gross royalty.
