THE BOURSE WHISPERER: Chinalco Yunnan Copper Resources has signed a binding agreement with Xstrata Mount Isa Mines (Xstrata Copper) to commence exploration activities on the Mount Frosty project.
The Mount Frosty project covers the Mary Kathleen shear zone and is located about 60 kilometres east of Mount Isa in far north west Queensland.
Source: Company announcement
The project is contiguous with Chinalco’s 100 per cent-owned Mt Isa project and with part of the Mary Kathleen Joint Venture project, in which Chinalco holds 70 per cent with the remaining 30 per cent held by Goldsearch.
Under the terms of the joint venture, Chinalco will farm in to the Mount Frosty project and can earn up to a 75 per cent interest by spending $4.5 million in the next 6 years in a two stage earn-in.
Xstrata Copper retains a right to buy back 26 per cent of the project (to give Xstrata Copper 51 per cent and Chinalco 49 per cent) by paying three times the expenditure Chinalco would have contributed in the stage two period.
“We are excited in expanding our relations with Xstrata Copper with agreements now signed in Chile and Australia,” Chinalco Yunnan Copper Resources managing director Jason Beckton said in the company’s announcement to the Australian Securities Exchange.
“This agreement with the contiguous Xstrata Copper property allows Chinalco to further target blind copper deposits associated with the Mary Kathleen shear zone.
“Chinalco and Goldsearch has had success in defining a new copper sulphide zone at the Elaine prospect situated approximately six kilometres south of the historic Mary Kathleen uranium deposit along this regional shear zone.
“We will be using our refined exploration model for the Elaine prospect to build a pipeline of copper targets to be drilled in the current and next calendar years.”