Corazon to acquire WA copper –gold project

THE BOURSE WHISPERER: Corazon Mining (ASX: CZN) has secured an option to earn up to 75 per cent of Border Exploration, which owns 100 per cent of the Top Up Rise (TUR) project in the Gibson Desert region of north-eastern Western Australia.

Announcing the deal Corazon described the project to be prospective for large gold-copper intrusive related deposits, similar in style to Olympic Dam, Prominent Hill and Carapateena.

A primary target has already been identified on the project, which Corazon said is an unexplored gravity anomaly, which it considers to present one of the largest amplitude residual gravity anomalies in Australia.

The core of the anomaly is eight kilometres by four kilometres in area, similar in size to the Olympic Dam geophysical anomaly.

“We believe this project presents a unique opportunity to quickly test and explore for a world class style of deposit on our doorstep,” Corazon Mining chairman Clive Jones said in the company’s announcement to the Australian Securities Exchange.

“The project displays numerous indicators for the Olympic Dam style IOCG mineralisation.

“The anomaly is very large and, being one of the largest residual gravity anomalies in Australia, represents an exciting opportunity for the company.”

The company said the TUR project complements its existing portfolio of exploration and development projects, which includes the Lynn Lake nickel-copper sulphide project and the
Beaucage Lake high-grade gold exploration play, both located in Canada.

Details of the earn-in agreement include:

Stage 1 – Corazon to earn 10 per cent in Border through the issue of 15 million Corazon shares and 15 million Corazon options (3 year expiry date, at a price 134 per cent of the 5 day VWAP at issue) and cash consideration to Border for costs (of up to $250,000);

Stage 2 – At its election, Corazon to earn a further 41 per cent (total of 51 per cent) in Border by paying the vendors $200,000 in cash, and either defining a JORC-compliant Mineral Resource and completing a Scoping Study on the TUR project or spending a minimum of $4 million on exploration; and then subsequently issuing Border with Corazon shares or cash equal to 10 per cent of the issued capital of Corazon; and

Stage 3 – At its election, Corazon to earn a further 24 per cent (total of 75 per cent) in Border by completing a definitive feasibility study on the TUR project (if the vendors decide not to contribute towards development at this stage). Consideration for the Stage 3 interest will be calculated with reference to a sliding scale, based on Corazon’s market capitalisation at the time. The maximum consideration payable will be $6 million (payable in either cash or shares or combination of both, at the election of Corazon) should Corazon’s market capitalisation be greater than $500 million;

The vendors of Border will be free carried until a decision to mine is made; and

Upon Corazon making a decision to mine the TUR project, the vendors and Corazon will form a formal production joint venture. A pre-emptive right will exist between the parties to the joint venture.

The acquisition of an interest in Border by Corazon will be subject to all necessary Corazon shareholder approvals, including those approvals required because Corazon managing director Brett Smith is a director and Shareholder of Border.