Matsa, IGO sign $7m agreement

IGO has struck another farm-in deal in the Fraser Range, agreeing to fund exploration at Matsa Resources' Symons Hill project, with the potential to secure a 70 per cent stake over the next three years.

The site, which is six kilometres away from IGO’s Nova nickel mine, is highly prospective for copper and nickel.

Under the agreement, Matsa could receive cash payments of up to $3.5 million and is not required to incur any costs until IGO completes a feasibility study or decides to develop the site.

IGO must first pay Matsa $625,000 for a 24-month period and spend $1.5 million in exploration to maintain its option.

The second payment, if IGO chooses to continue exploration after 24 months, IGO will pay Matsa $1.38 million for a 12-month period and must spend at least $500,000 on exploration costs.

After a 36-month period, IGO can acquire a 70 per cent interest in the project by paying Matsa $1.5 million.

Matsa executive chair Paul Poli said the Symons Hill nickel project had been on the backburner for some time, with Matsa’s focus on the Lake Carey gold project, but the company had always maintained the site held considerable value.

“To partner with someone of IGO’s calibre demonstrates that value,” he said.

“I look forward to IGO using their vast knowledge and experience to exploit Symons Hill, while allowing Matsa shareholders to keep an exposure by retaining a 30 per cent joint venture interest.

“It’s worth noting that Matsa controls some 170km in its own right within the Fraser Range that is also of high value.”

Shares in IGO are down 8 cents to $4.96 each at 1pm AWST, after opening at $5.04.

Matsa shares closed slightly higher at 14.5 cent each.