THE BOURSE WHISPERER: Carawine Resources (ASX: CWX) has entered into a Farm-In and Joint Venture Agreement with a subsidiary of FMG Resources (ASX: FMG).
Carawine Resources said the deal will cover exploration of the Lamil Hills (E45/5326), Trotman South (E45/4847) and Sunday (E45/5229) tenements all part of the company’s Paterson project in Western Australia.
Lamil Hills is within 30 kilometres to the northwest of Newcrest Mining’s Telfer gold-copper mine; Trotman South is 30km to the south of the Telfer mine; and Sunday is within 5km of Metals X’s Maroochydore copper-cobalt deposit.
The tenements are at an early exploration stage, with Carawine’s work to date comprising target generation activities based mostly on work by previous explorers.
Under the terms of the agreement FMG will explore Carawine’s eastern Paterson project tenements targeting copper, gold and base metals.
Fortescue is to pay $125,000 cash up front and spend $0.5 million on exploration in the first eighteen months.
Fortescue has the right to earn up to a 75 per cent interest by spending $6 million total in two stages:
Stage 1: 51 per cent interest after $1.5 million exploration spend within three years; and
Stage 2: 24 per cent interest after additional $4.5 million exploration spend within four years.
The agreement works well for both entities as it provides Fortescue with highly prospective tenement holding within the Paterson Province and ensures Carawine is well positioned to share in the benefits of any discovery.
The deal complements Carawine’s recent farm-in and joint venture agreement with Rio Tinto subsidiary, Rio Tinto Exploration Pty Ltd, with the potential for up to $11.5 million to be spent on exploration at the Paterson Project under both agreements.
“With the addition of Fortescue as a partner in the Paterson we now have two major resource companies funding exploration on our Paterson tenements,” Carawine Resources managing director David Boyd said in the company’s announcement to the Australian Securities Exchange.
“This Agreement gives Fortescue access to underexplored tenements over highly prospective ground.
“This deal also ensures Carawine is well positioned to share in the benefit of any discoveries, with Fortescue well placed to support a potential development should the exploration activities be successful.
“The Agreement with Fortescue represents a further endorsement of Carawine’s exploration targeting strategy, which has already led to the formation of active joint ventures with Rio Tinto Exploration in the Paterson province and with Independence Group NL in the Fraser Range region of WA.”