THE BOURSE WHISPERER: Breakaway Resources (ASX:BRW) has signed an $8 million farm-in joint venture with Australian copper producer Sandfire Resources (ASX: SFR).
Sandfire has reached agreement with Breakaway’s 100 per cent-owned subsidiary Levuka Resources to farm-in to the broader Altia project, located 70 kilometres south-east of Cloncurry in north-west Queensland.
Sandfire JV locations (in red). Source: Company announcement
Sandfire has also agreed to inject $600,000 to acquire a 6.3 per cent interest in Breakaway.
The additional funding will be used for ongoing exploration of the company’s 100 per cent-owned Eloise exploration project, including its flagship Sandy Creek copper-gold project, where it is in the process of calculating a maiden JORC resource estimate.
We are thrilled to have secured a company of Sandfire’s calibre to progress the evaluation of the broader Altia project, which we believe offers outstanding potential for the discovery of large-scale Broken Hill-type deposits,” Breakaway Resources managing director Victor Rajasooriar said in the company’s announcement to the Australian Securities Exchange.
The work undertaken at Altia over the past few years has clearly established the technical merits and potential of the project and, after looking at it with a fresh set of eyes with Sandfire, we believe that the Altia deposit may form part of a much larger mineralised trend which offers multiple targets for a major new discovery.
“With the injection of funding and technical know-how from Sandfire, the newly established joint venture will be in a much stronger position to assess the project and appropriately target its exploration activities with a view to identifying a sizeable new discovery.”
The tenements encompassed by the Joint Venture include the Altia deposit, where Breakaway has delineated a maiden Inferred Mineral Resource of 5.8 million tonnes at 40 grams per tonne silver, 4 per cent lead and 0.5 per cent zinc.
Under the terms of the Joint Venture agreement, Sandfire can earn an initial 60 per cent interest by spending $4 million on exploration over a three-year period, and can then elect to increase its stake to 80 per cent by spending a further $4 million over the subsequent three years.
“We are particularly pleased that Sandfire has recognised the growth potential within our large project portfolio by agreeing to join our share register as a strategic shareholder,” Rajasooriar said.
“We believe this represents a strong vote of confidence in our broader Eloise exploration project, where we have multiple copper-gold exploration targets plus a relatively advanced project at Sandy Creek.
“The funding injection from Sandfire will help us move to the next stage of evaluating the Sandy Creek project by undertaking a Scoping Study once we complete the maiden JORC resource estimate, for which work is currently underway.
“We are in the process of assessing the best way forward for the Eloise project, including opportunities to move Sandy Creek towards a production scenario in the near term.”