St George left to go it alone at East Laverton

BHP Billiton has withdrawn from a farm-in agreement with St George Mining over nickel rights attached to the East Laverton project just months after agreeing to proceed with the deal.

St George announced today that BHP Billiton Nickel West had given notice of its withdrawal from the farm-in agreement, known as Project Dragon, leaving St George with 100 per cent ownership of all nickel rights at the East Laverton project.

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

St George hailed the arrangement at the time of its announcement as a "giant leap forward" and an important milestone in the company's exploration activities.

BHP agreed to proceed with the deal in May this year, nominating seven exploration licences at the East Laverton property to be included in the farm-in tenements.

St George executive chairman John Prineas said today that the company's newly-regained sole ownership of the tenements was good news for its shareholders.

"Since that time we have had significant exploration success in our own right at East Laverton, while at the same time obtaining tremendously valuable experience via Project Dragon," he said.

"We are very excited to have consolidated 100 per cent ownership of this flagship asset, which gives us the best opportunity to take advantage of its exciting potential through a concerted program that we can control across the whole project area."

BHP will make a cash payment to St George to satisfy its obligation under the agreement to maintain farm-in tenements in good standing.

St George shares were steady at 10 cents at 10:00AM WST.