THE BOURSE WHISPERER: Peel Mining (ASX: PEX) announced that its wholly-owned subsidiary company Peel (CSP) Pty Ltd has entered into a Memorandum of Agreement (MoA) with Japan Oil, Gas and Metals National Corporation (JOGMEC).
Under the terms of the agreement JOGMEC may earn up to 50 per cent of certain exploration tenements owned by the subsidiary, located in New South Wales, known as the Cobar Superbasin project by funding up to $7 million of exploration expenditure.
Key terms of the MoA are as follows:
Stage 1 – JOGMEC has the right to earn a 40 per cent interest in the Cobar Superbasin project by funding $4 million of exploration expenditure on the project tenements over a period of up to three years;
JOGMEC has the right to earn a further 10 per cent interest in the project tenements, by funding a further $3 million of exploration expenditure on the tenements over a period of up to two further years;
JOGMEC is required to spend a minimum of $500,000 before withdrawing from the agreement;
Subject to JOGMEC earning a vested interest in the project tenements, the companies will form a Joint Venture;
Peel to act as Operator of the project on behalf of the parties during the farm-in and any subsequent JV unless JOGMEC becomes a majority owner, at which point the Operator shall be appointed by JOGMEC;
The MoA is subject to Australian Foreign Investment Review Board approval (FIRB), if required;
JOGMEC has the right to assign its interest in the agreement (this is in line with JOGMEC’s mission, which is to help source and de-risk opportunities for Japanese corporations).
Cobar Superbasin project tenements subject to JOGMEC Farm-in agreement. Source: Company announcement
“This is a great outcome for Peel at a time when funding for exploration activities is difficult,” Peel Mining managing director Rob Tyson said in the company’s announcement to the Australian Securities Exchange.
“The JOGMEC deal gives Peel a clear path for exploration on the Cobar Superbasin assets in the medium term, and along with the co-funding agreements with the NSW government announced on 22 September 2014, provide Peel and JOGMEC the best opportunity for exploration success.
“Exploration has been ongoing throughout the year and resulted in the delineation of several priority targets which we plan to commence drilling on in the near term.”