THE BOURSE WHISPERER: With the APPEA Conference visiting Perth this week our JV update has a bit of an Oil & Gas feel about it.
Farm-in to onshore New Zealand oil discovery
MEO Australia Limited (ASX: MEO), through its wholly-owned subsidiary, MEO New Zealand Pty Limited, has executed a binding agreement with AIM-listed Kea Petroleum Plc (AIM: KEA) whereby MEO will farm into Kea’s 100 per cent-owned PEP 51153 exploration permit along the eastern margin of the Taranaki Basin, onshore New Zealand by way of a staged work program.
MEO will initially earn a 30 per cent interest by funding NZ$4 million (80 per cent) of a NZ$5 million firm work program.
Following the completion of Phase I, MEO has options to acquire Kea’s remaining interest or proceed with a second phase work program to a capped value of NZ$9 million.
MEO can elect to increase its interest in the permit to 50 per cent by funding NZ$7.5 million of this program.
PEP 51153 covers an area of 104.4 square kilometres and contains the 2012 Puka oil discovery in the Mount Messenger Formation.
The discovery wells, Puka-1 and Puka-2, are producing approximately 80 barrels oil per day (bopd) under an extended well test, limited by sub-optimal location and completion constraints.
The discovery requires successful appraisal to more fully quantify the resource size and productivity ahead of full field development.
Selwyn Range project JV agreement
Elementos Limited (ASX: ELT) has signed a binding term sheet for an earn-in joint venture with Below Ground Technology (BGT), to explore for copper and gold at the Selwyn Range project in far-north Queensland.
BGT is a private company managed by Robert Aird, a geologist with extensive experience exploring in the Mt Isa Inlier.
The Selwyn Range project includes three granted Exploration Permits, 19371, 19375 and 19426, and comprises a largely contiguous block totalling 109 square kilometres, located 120 kilometres south of Cloncurry.
The binding term sheet for the earn-in of Selwyn Range project consists the following terms:
The right to earn 51 per cent of the project by investing $0.6 million over 3 years; and
The option to increase its interest by a further 19 per cent, by investing an additional $0.6 million over a further 2 years.
Once BGT earns a 70 per cent interest, each party can either contribute or dilute according to an agreed formula and work program.
If either party achieves a 90 per cent interest in the project, the other party’s 10 per cent interest immediately converts to a 2 per cent NSR.
The agreement is subject to finalisation of a full joint venture agreement.
Investment in WCB Resources
Sandfire Resources (ASX: SFR) has reached agreement to acquire an interest in Toronto-listed copper-gold explorer, WCB Resources Ltd (TSX-V: WCB) by subscribing for shares in a $5.9 million private share placement.
Sandfire explained the proceeds from this private placement will be used to progress exploration including upcoming drilling programs at WCB’s Misima copper-gold project.
WCB is currently earning a 70 per cent interest in this project through a joint venture with Pan Pacific Copper, an integrated copper mining and smelting company jointly owned by JX Nippon Mining & Metals Corporation and Mitsui Mining & Smelting Company Ltd.
Sandfire said the investment will provide the company with exposure to a potential Tier-1 porphyry copper-gold exploration opportunity with plenty of upside.
WCB has identified a copper-gold porphyry target at Misima located adjacent to an historical gold mine formerly owned by Placer Dome Asia Pacific, which produced 4 million ounces of gold and 20 million ounces of silver.
The main exploration target is the Misima Porphyry at Mt Sisa, where WCB plans to undertake diamond drilling on a large one square kilometre copper soil anomaly later this year.
Sandfire Resources director John Evans led the discovery and drill-out of the DeGrussa copper-gold deposit.
Evans said Misima was an exploration opportunity for the discovery of a major porphyry copper-gold deposit in a location with a strong history of mining and development.
“Opportunities of this nature are very rare and Sandfire is pleased to be able to participate in such a wonderful opportunity for our shareholders,” Evans said.