THE BOURSE WHISPERER: IronClad Mining (ASX IFE) has signed a deal with Trafford Resources (TRF: ASX) giving it the right to earn up to an 80 per cent interest in all the manganese over the Wilcherry Hill project area.
IronClad said it considers the exploration and development of manganese at Wilcherry Hill to have synergies with the proposed iron ore operation the company is currently developing.
A Joint Venture Agreement incorporating the main terms listed below, is anticipated to be executed by both parties within the next month.
“This Joint Venture is a very exciting development for IronClad,” IronClad Mining managing director Robert Mencel said in the company’s announcement to the Australian Securities Exchange.
“The addition of manganese has the potential to add significant value to the Wilcherry Hill project.”
The terms of the agreement include:
– IronClad to complete 4,000m of Reverse Circulation (RC) drilling within 12 months of the JV agreement being signed;
– IronClad to pay Trafford $250,000 upon signing the JV agreement;
– IronClad can earn 50 per cent in the project tenements by spending $1 million within one year from the date of the agreement;
– IronClad has the right to earn an additional 30 per cent in the project by spending an additional $2 million over a 2 further years;
– IronClad will be the manager of the Joint Venture;
– Upon IronClad reaching an 80 per cent interest; Trafford’s remaining 20 per cent interest will be free carried up to a decision to mine; at which point if Trafford elect not to contribute they will dilute by an industry standard formula, to a minimum of a 10 per cent interest before converting to a two per cent gross revenue royalty;
– On signing of the JV agreement IronClad and Trafford will form an exploration committee that will agree upon exploration/development programs during the earn in period; and
– The JV Agreement will be signed within a month of date of the letter agreement.
As part of its due diligence on the Manganese potential at Wilcherry Hill, IronClad recently submitted samples for preliminary metallurgical test work, the final results of which the company expects to be released in the coming week.