11/06/2020 - 13:47

IGO to explore Metals X copper project

11/06/2020 - 13:47

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Metals X has signed a $32 million farm-in and joint venture agreement with IGO, which will explore the company’s copper operations in the Paterson province, while also announcing the potential restart of its Nifty operations.

IGO to explore Metals X copper project
Peter Bradford says IGO has recognised the exploration potential of the Paterson Province. Photo: Attila Csaszar

Metals X has signed a $32 million farm-in and joint venture agreement with IGO, while also announcing the potential restart of its Nifty operations.

Under the terms of the arrangement, IGO will undertake exploration activity at Metal X's copper operations in the Paterson province. 

This recent exploration deal follows recent farm-ins signed by Antipa Minerals with Rio Tinto and Newcrest Mining in the area.

Under the deal, IGO can sole fund exploration activities over six and a half years to earn a 70 per cent interest in Metal X's Paterson project, upon which a joint venture between the two companies will be formed.

South Perth-based IGO is required to spend a minimum $11 million in the first three and a half years, with exploration activities likely to begin in the September quarter.

Managing director Peter Bradford said the company had recognised the exploration potential of the Paterson region.

“The joint venture with Metals X … further consolidates IGO’s presence in this highly endowed, yet under-explored province,” he said.

Metals X chief executive Michael Spreadborough said the farm-in was a significant exploration commitment by IGO.

Metals X looks forward to working closely with IGO to rapidly unlock the exciting exploration potential of the Paterson exploration project, which could potentially deliver additional value through the established infrastructure at Nifty,” he said.

The company’s Nifty copper operation is surrounded by its Paterson project, but is not included in the deal.

It had experienced long-running operational issues before being placed into care and maintenance in November last year.

Mr Spreadborough said Metals X would retain full control of both the Nifty and Maroochydore copper projects, which collectively host more than 1 million tonnes of in-ground copper metal.

The Perth-based company also today released scoping study results for the Nifty operation, completed as part of a strategic review, which identified the potential for a 10-year open pit operation, producing around 26,000 tonnes of copper each year.

All-in sustaining costs were estimated to be around $5,400-5,800/t of copper produced, along with treatment and refining costs of around $960/t of copper sold.

Metals X said the strategic review of its copper assets was in its final stages.

The company will make a decision on undertaking a feasibility study on the Nifty restart in July. A final investment decision is expected in the first half of next year.

Chairman Patrick O'Connor said it had been a difficult period for shareholders since Nifty operations were suspended in November.

He said Nifty, combined with the Maroochydore copper project, was a significant asset that needed to be commercialised through the completion of further studies.

Shares in Metals X were up 2 per cent to trade at 9.4 cents per share, as at 3:10pm AEST.

IGO shares were down 2.8 per cent to trade at $5.14.

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