St George jumps on BHP farm-in

St George Mining shares have risen 16 per cent after BHP Billiton Nickel West agreed to proceed with a farm-in arrangement over nickel rights to tenements at St George’s East Laverton project.

St George said BHP had nominated seven exploration licences at East Laverton to be included as farm-in tenements for Project Dragon.

At 11:10AM, WST, St George shares were up 2.5 cents, at 17.5 cents.

Under the agreement, which was first announced in 2011, BHP holds a two-year option over the tenements, with an obligation to spend at least $600,000 on exploration during the option period.

On exercise of the option, BHP can earn a 51 per cent interest in the nickel rights of the tenements by spending at least $3 million on exploration over the next two years.

BHP can increase its stake in the tenements to 70 per cent by funding a bankable feasibility study.

St George will retain 100 per cent of the rights to gold and all other metals within the tenements.