Maximus Resources signs exploration MoU with Monax Alliance

THE BOURSE WHISPERER: Maximus Resources (ASX: MXR) has struck up a friendship with Monax Alliance Pty Ltd, entering into a binding Memorandum of Understanding (MoU) with Monax Alliance to undertake technical due diligence on the Billa Kalina project located in the Gawler Craton region within the Woomera Prohibited Area (WPA) in South Australia.

Monax Alliance is a wholly-owned subsidiary of Monax Mining (ASX: MOX).

“Maximus is pleased to have secured an exploration partner of the calibre of the Monax Alliance with the financial backing of a significant international producer and explorer and is looking forward to advancing the exploration of these quality tenements in search of major IOCGU targets,” Maximus Resources said in its ASX announcement.

The Billa Kalina project comprises four granted tenements, EL 4463, EL 4854, EL 4898 and EL 4899 that are owned 100 per cent by Maximus.


Source: Company announcement


The project area is located approximately 600km northwest of Adelaide, between BHP Billiton’s (ASX: BHP) Olympic Dam operation and Oz Minerals’ (ASX: OZL) Prominent Hill operation.

Maximus explained the project area remains largely under-explored, despite being subjected to a wide spaced regional airborne survey in the 1970’s and small targeted exploration programs since Maximus acquired the tenements in 2005.

Under the terms of the MoU with Maximus, the Alliance has a six month exclusive period to undertake technical due diligence on the project.

The Alliance plans to undertake a detailed gravity survey across numerous initial target areas to assist with modelling and target delineation.

Maximus receives US$25,000 upon signing the MoU.

Prior to expiry of the six month exclusivity period, the Alliance has the option to enter into a farm-in agreement with Maximus to earn 80 per cent equity in the Billa Kalina project by investing US$3 million in exploration over a three year period, subject to a minimum commitment of US$500,000 in the first year.

The Alliance is to manage all exploration programs conducted during the farm-in period.

Maximus will receive a further US$100,000 payment following signing of a farm-in agreement by the Alliance.

Upon meeting the farm-in requirements and electing to enter into a Joint Venture (JV) with Maximus, the Alliance will have earned 80 per cent equity in the project.

Each party is required to contribute to ongoing JV expenditure once the JV is established or dilute its equity in the project.

Should Maximus elect not to enter into the JV with the Alliance, it can sell its 20 per cent share of the project to the Alliance for US$4.5 million and retain a Net Smelter Royalty (NSR) of 2 per cent.

If either party’s equity reduces below 10 per cent, the remaining equity will convert to a 2 per cent NSR, which may be purchased at any time up to a decision to mine for an agreed amount.