Shares in Leederville-based mineral explorer Smarttrans Holdings Ltd surged 133 per cent after signing a joint venture agreement with Zinifex Australia Ltd to work on the company's nine base metals tenements near Zinifex's Century mine in Queensland.
The company closed at 42 cents, after opening at 31 cents and reaching a high of 54 cents in early trade.
Under the terms of the proposed joint agreement, Zinifex can earn 70 per cent equity in the tenements by expenditure of at least $10 million over 7.5 years to the completion of a bankable feasibility study.
The news came as shares in Zinifex, the world's second-biggest zinc producer, fell 23 cents, or 1.3 per cent, to $17.64, which analysts had attributed to the company's short mine life and higher smelting costs.
The full text of a company announcement is pasted below
SmartTrans Holdings Ltd has signed a binding joint venture agreement with Zinifex Australia Ltd on SmartTrans' advanced exploration tenements covering 56,320 hectares near the Century zinc mine in North Queensland.
The agreement allows Zinifex to earn 70 per cent equity in the project by spending at least $10 million over 7.5 years on exploration and completing a bankable feasibility study.
Zinifex will manage the joint venture and will start work this month. It will spend at least $1 million during the next 18 months. If Zinifex then proceeds to the second and third stages it will spend at least another $9 million during the following six years.
Upon completion of Stage 3 including finalisation of a bankable feasibility study, Zinifex will acquire 70 per cent equity in the project. No equity is earned prior to completion of stage 3.
SmartTrans will then have the option to contribute funds to the project in proportion to its 30 per cent equity or to not contribute and dilute its interest. SmartTrans also has an option to convert its 30 per cent equity to a Net Smelter Return Royalty of 2.5 per cent if and when a decision to mine is made.
SmartTrans chairman John Forsyth said he was buoyed by Zinifex's vast knowledge of the geological and mining environment in the area, its proven technical expertise and financial capacity.
"Zinifes is the ideal joint venture partner for this project," he said.
