Sheffield Resources strikes Fraser Range JV with Independence Group

THE BOURSE WHISPERER: Sheffield Resources (ASX: SFX) has struck Joint Venture agreement with Independence Group (ASX: IGO) covering Sheffield’s ground in the Fraser Range region of Western Australia.

Sheffield Resources announced the agreement by explaining it encompasses four granted tenements E69/3052 & E69/3033 (Red Bull), E39/1733 (Big Bullocks), E28/2374-I (Bindii) and one tenement application, ELA69/2563 (Similkameen).

Independence Group are a logical fit for the deal, considering the company already IGO owns the Nova nickel mine and has substantial exploration interests in the Fraser Range.

“We are very pleased to have formed the Fraser Range joint venture with IGO,” Sheffield Resources managing director Bruce McFadzean said in the company’s announcement to the Australian Securities Exchange.

“They are a well-funded, dedicated nickel explorer and their ownership of the Nova mine underpins a long-term commitment to the region.

“The Joint Venture allows Sheffield to retain significant exposure to exploration success in the Fraser Range, should the company contribute to its 30 per cent interest beyond the initial earn-in phase.”

Key terms of the joint venture are:

IGO will earn a 51 per cent interest in the project by making an up-front cash payment of $500,000;

IGO may earn an additional 19 per cent interest by spending $5 million within five years of commencement of the Joint Venture;

At any time after commencement of the Joint Venture and up until completion of the Prefeasibility Study, IGO has an option to purchase an additional 5 per cent interest for $10 million or the equivalent in IGO shares; and

Standard dilution clauses apply. Should Sheffield’s interest dilute to 5 per cent or less, it shall automatically convert to a 1 per cent net smelter return royalty.

“The up-front cash payment of $500,000 is a welcome addition to our cash reserves, and follows the $17.1 million capital raising completed last quarter,” McFadzean continued.

“It is pleasing to have a high quality partner in IGO carry the project forward, enabling us to focus on the Thunderbird mineral sands project.

“The company is due to deliver the Thunderbird BFS in Q1 2017, and has commenced offtake and financing negotiations as a part of the development of this tier 1 mineral sands asset.”

Email: info@sheffieldresources.com.au

Website: www.sheffieldresources.com.au