THE BOURSE WHISPERER: Bligh Resources has entered into a Joint Venture Deed of Agreement with Chinese company Jiaocheng Yiwang Ferroalloy over the company’s 100 per cent-owned Grenfell project in central New South Wales.
Yiwang is one of China’s largest producers and exporters of manganese alloys.
“We are very pleased to have agreed terms with one of China’s leading manganese alloy producers,” Bligh Resources executive director Rob Benussi said in the company’s announcement to the Australian Securities Exchange.
“Bligh has a strategy focussed on securing agreements and partnerships with established companies who can bring technical expertise and backing to its projects.
“This deal with Yiwang is significant, and we are looking forward to working together to develop the Grenfell project.
“This agreement also allows Bligh to fast-track its exploration efforts whilst maintaining a strong cash balance.”
The Grenfell project, targeting manganese mineralisation, covers two exploration licenses extending over 313 square kilometres.
Bligh has recently completed geophysical data sets with numerous faults identified.
Yiwang has the potential to earn a 50 per cent interest of Bligh’s Grenfell manganese project through a total spend of $3.6 million.
The agreement is based on staged exploration funding from Yiwang to earn its interest in the Grenfell project:
Stage 1 – Yiwang to spend $600,000 on exploration to earn 5 to 10 per cent (the second 5 per cent is allocated if Yiwang elects to progress to stage 2);
Stage 2 – Yiwang to spend $1,000,000 on exploration to earn a further 15 per cent;
Stage 3 – Yiwang to spend $1,000,000 on exploration to earn a further 10 per cent;
Stage 4 – Yiwang to spend $1,000,000 on exploration to earn a further 5 per cent; and
Stage 5 – Final 10 per cent issued to Yiwang upon completion of BFS and based on pre-agreed terms and conditions.
As part of the agreement, Bligh will be required to invest 50 per cent of Yiwang’s exploration spend at each stage to maintain its interest in the project.
The first funding from Yiwang is due within 21 days from the signing of the JV agreement on August 6, 2012.
Chairman of Yiwang, Jinle Song will join the Board of Bligh.