Monax begins drilling Punt Hill

THE DRILL SERGEANT: Monax Mining has commenced drilling at its flagship Punt Hill copper-gold project located within the Olympic iron-oxide copper-gold (IOCG) province in South Australia.

The company has four holes, totalling 3200 metres, planned to test high-priority gravity targets.

Three of the four holes will be drilled on the Yeltacowie target where the company has interpreted the basement to be much shallower than previous drilling it had carried out on the Punt Hill target.

Monax said geophysical modelling and limited historical drilling has suggested the targets are between 250 metres and 450 metres below the surface on Yeltacowie.

The drilling program is being funded through Monax’s farm-in agreement with Chilean mining company, Antofagasta PLC, through its wholly-owned subsidiary Antofagasta Minerals S.A.

The Punt Hill farm-in agreement is Antofagasta’s first investment in Australia.

Under the agreement, Antofagasta can earn a 51 per cent interest in the Punt Hill project by spending US$4 million over four years.

Once Antofagasta has earned its 51 per cent, Monaxt then has the ability to remain at 49 per cent by co-funding exploration or development costs, or can elect to have its interest diluted.

Antofagasta can earn a further 19 per cent equity in the project should it spend a further US$5 million on exploration and development of the project tenements.

If the decision to development the project is made Antofagasta will pay Monax a success fee of US$10 million.

Antofagasta must spend a minimum of US$1.5 million on the Punt Hill project within the first two years.

“Monax and Antofagasta are extremely pleased to be back exploring the Punt Hill copper-gold project”, Monax Mining managing director Gary Ferris said in the company’s announcement to the Australian Securities Exchange.

“This coincides with a time of exciting new developments within the Olympic IOCG province, particularly the recent confirmation of BHP Billiton’s plan to significantly expand its Olympic Dam operations, OZ Minerals’ drill out of Carrapateena deposit, the recent deal between Rio Tinto and Tasman Resources over the Vulcan prospect and Rex Minerals’ Hillside project.

“The Olympic IOCG province is world class and remains vastly underexplored.”

Monax anticipates the upcoming drilling campaign to take about 50 days to complete with results expected in late 2011 or early 2012.