THE BOURSE WHISPERER: Minotaur Exploration (ASX: MEP) and OZ Minerals (ASX: OZL) have struck up a binding collaboration agreement over OZ Minerals’ tenements in the Mt Woods area in South Australia, specifically excluding the Prominent Hill mine Mining Licence ML 6228.
Minotaur Exploration provided a bit of a history lesson in its ASX announcement of the deal, referring to the initial discovery of Prominent Hill some ten years ago by the previous incarnation of the company – Minotaur Resources and the subsequent transfer of ownership to Oxiana Limited, which morphed into being OZ Minerals.
Since all this happened OZ Minerals has carried out extensive greenfields exploration work in the region around the Prominent Hill mine camp, building a vast library of exploration knowledge, comprising geophysical data, geochemistry, drill logs, drill core etc.
That work has resulted in numerous discoveries, however Minotaur Exploration said it believes scope exists for the database to reveal further opportunities.
“Given its resources are currently directed towards identifying and acquiring advanced mineral assets OZ Minerals invited Minotaur Exploration to partner with it in an endeavour to identify, assess and test prospects which could lead to new copper discoveries,” Minotaur Exploration said.
“The Gawler Craton is a highly prospective formation so we believe there could be many large discoveries yet to be made,” Minotaur Exploration managing director Andrew Woskett said.
“The Minotaur team is very excited at the prospect of re-entering the tenements of its origins, particularly in partnership with OZ Minerals.
“Minotaur considers the agreement to be of significant strategic value, complementing OZ Minerals’ number three position on Minotaur’s shareholder register.
“It is entirely consistent with Minotaur’s drive to cement strong joint venture alliances with highly credentialed industry participants, sharing exploration risk and cost.”
Under the arrangement Minotaur Exploration will have unrestricted access to OZ Minerals’ database and its physical components, saving it millions of dollars and years of exploration work, from which Minotaur will potentially identify new options for mineral discovery.
For its part, OZ Minerals will reimburse Minotaur for up to 80 per cent of its time costs expended on the research work.
If the two companies collectively agree on the merits of a particular target, an on-ground assessment will be carried out.
A $3 million budget funded 50/50 will allow for initial truthing of prospects to achieve ‘proof of concept’, with Minotaur as operator.
Following the ‘proof of concept’ phase a Joint Venture will be formed in which the beneficial interest in each prospect will be notionally allocated 80 per cent to OZ Minerals and 20 per cent to Minotaur.
Minotaur may then elect to sole fund the initial $2 million of exploration activity to earn an additional 10 per cent interest in a particular target (bringing its equity to 30 per cent) otherwise each party will contribute on a pro-rata basis or Minotaur may dilute.
“This is a win-win for OZ Minerals and Minotaur. We get Minotaur’s proven expertise in exploration and analysis and they get access to our vast repository of data,” OZ Minerals managing director and CEO Andrew Cole said.