Producing new alliances

Several smaller WA gold and nickel explorers have been busy striking deals with larger international producers in recent weeks, to gain territory and advance exploration.

Conquest Mining has secured an interest in prospective territory in Queensland after signing a heads of agreement with South African gold giant Gold Fields. The deal, which gives Conquest an initial 40 per cent interest in Queensland Bowen and Drummond Basin tenements, has delivered Gold Fields subsidiary Gold Fields Australasia a six per cent stake in Conquest.

Meanwhile ReLODE, keen to commence exploration of its South Australian Musgrave Range assets, but also holding plenty of Western Australian Musgrave territory and Gawler Craton copper-gold interests, has signed with Rio Tinto for a joint venture on two of the SA Musgrave tenements.

Rio will earn an initial 60 per cent interest over three years, by laying out $1.5 million for exploration.

ReLODE can convert a 20 per cent interest to a net smelter return royalty, something it has done with a joint venture heads of agreement with Western Areas in the Yilgarn Cundeelee exploration project.

Western Areas is committing itself heavily in a move to advance its focus on nickel sulphide.

Several dots and crosses are yet to be made, plenty of finance raised along the way, and some plaints to be resolved, but Western Areas is moving towards a 75 per cent interest in the non-precious metals output from the southwest Forrestania project.

The company has secured an option agreement with Finnish nickel heavyweight Outokumpu Mining subsidiary Outokumpu Mining Australia and Viceroy Australia’s administrators Ferrier Hodgson, to gain Viceroy’s interest in the project, the precious metals side of which belongs to Sons of Gwalia.

Western Areas managing director Julian Hanna said the company was particularly excited about some obvious targets in high-grade territory that the larger Outokumpu may not consider big enough for their purposes. Western Area planned to commence drilling in May, to confirm resources by September, he said.

The joint venture agreement will cost up to $1.3 million by the middle of next year and Western Areas must spend $500,000 before a withdrawal.

In addition Western Areas, which has a $9 million market capitalisation, has signed a $400,000 option to purchase Tectonic Resources’ Ravensthorpe nickel processing plant.

Earlier this year Western Areas wooed major platinum producer Placer Dome to sign a heads of agreement in Western’s Plumridge platinum holdings.

Over the next three years, Placer Dome Asia Pacific can earn a 65 per cent interest in the territory, 400 kilometres northeast of Kalgoorlie, by spending $2.5 million, allowing Western Areas to concentrate on its nickel sulphide targets.

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