Vital secures funding for Watershed

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THE BOURSE WHISPERER: Queensland-focused tungsten developer and West African gold explorer, Vital Metals has confirmed Japan Oil, Gas and Metals National Corporation (JOGMEC) as a Farm-in partner in the Watershed tungsten project in far north Queensland.

JOGMEC has provided a formal Notice of Participation in the Watershed project with commitment to fund $5.4 million in stages.

Vital Metals chief executive officer Mark Strizek said JOGMEC’s decision to provide the funding for additional exploration and the Bankable Feasibility Study had reinforced the company’s confidence in the project’s potential.

“This is a defining agreement for both the Watershed project and the company,” Strizek said in the company’s announcement to the Australian Securities Exchange.

“JOGMEC have put Watershed through a thorough due diligence process and it has passed all of their project benchmarks.

“We are extremely pleased to have attracted such a credible partner in JOGMEC and look forward to advancing the Watershed project.”

Strizek said Vital had been impressed by the capability and enthusiasm of the JOGMEC team during the due diligence process.

“We have received the green light with the Notice of Participation from JOGMEC and have agreed to a plan and　completed preliminary costing of the work required,” he said

“We will use the funding to complete the BFS　to realise the project’s value for Vital Shareholders.”

Vital considers Watershed to be a prospective tungsten project.

It has a JORC code compliant Indicated Resource of 15.3 million tonnes at 0.46 per cdent tungsten.

A Prefeasibility Study and environmental approvals are well advanced on the project.

“Importantly, tungsten prices are strong and market forecasts confirm our expectation that demand and prices will remain firm in the medium term, providing an excellent window of opportunity for Watershed’s development,” Strizek said.

JOGMEC will make the $5.4 million payment in a series of instalments over the Earn-In period, including an initial payment of $800,000 by 30 September 2011.