THE BOURSE WHISPERER: Northern Territory-based phosphate exploration company NuPower has entered into a Heads of Agreement with private fertilizer company FERTOZ.
The deal is in regard to a joint venture (JV) into an exploration license owned by FERTOZ, which will be known as the ‘Barra Joint Venture’.
Location of Fertoz EL26915 with respect to Arganara and Warrabri Project EL’s. Source: Company announcement
Under the terms of the Barra JV NuPower can earn an initial 10 per cent through exploration expenditure totaling $100,000 during the first year.
Once it has qualified for that level of ownership, NuPower may then elect to earn an additional 40 per cent by solely meeting exploration covenants over the next 24 months.
NuPower will manage the JV throughout this initial three year earn period to a 50 per cent JV interest.
“Progressing beyond this point both FERTOZ and NuPower may elect to co-contribute towards the ongoing exploration and development or dilute at a rate of 10 PER CENT per $100,000 spent by the other party,”NuPower said in its ASX announcement.
“If either party reaches 90 per cent ownership then it can automatically move to 100 per cent ownership through dilution, leaving the minority party with a right to be paid 0.5 per cent of gross revenue from any operation that may be developed on EL26915.”
The Exploration License in question is located between NuPower’s Arganara and Warrabri phosphate projects.
At Arganara NuPower has defined an area of phosphate mineralisation through reverse circulation (RC) drilling of 205 holes with numerous intersections already reported above 30 per cent Phosphate.
“Mineralisation remains open both to the east and south and is intersected by a tenement boundary to the west,” NuPower said.
“Arganara mineralisation is hosted by the Arthur Creek Formation and or equivalents of the Georgina Basin.
“Interpretation by NuPower indicates the Arthur Creek Formation extends west from Arganara through the new Barra JV exploration license EL26915 before trending northwest towards NuPower’s wholly owned Warrabri Project licenses.”
Nupower said it intends to complete a Rapid Air Blast (RAB) drill program on the JV exploration license targeting phosphate during 2012.