Western Areas flies Southern Cross
OUT AND ABOUT: There were canapés and Caronas flying between the booths of Southern Cross Goldfields and Western Areas when it was announced that the latter would be acquiring 70 per cent of the former’s nickel rights across much of its tenement portfolio in the Marda and Southern Cross regions of Western Australia.
Western Areas will acquire the 70% holding for a cash payment of $1.5 million along with minimum funding commitments of $1 million on nickel sulphide exploration during the first year after completion of the agreement.
This will be followed by minimum annual expenditure commitments of $250,000 for the first five years and $300,000 thereafter.
In an announcement to the Australian Securities Exchange Southern Cross said the transaction is consistent with its focus to develop its gold assets in the Marda region and its previously announced gold production and consolidation strategy.
The company currently has a feasibility study in progress looking to establish a central gold processing facility at Marda.
Previous exploration undertaken by Southern Cross, and others, has identified multiple nickel sulphide targets within the Bullfinch North tenements.
This includes a 66 kilometre strike length with known favourable nickel sulphide host rocks, encompassing multiple targets, some with known drill intersections, such as Trough Well, Lady Agnes, Scorpio and Sirius.
At Trough Well, previous RC drilling has intersected multiple zones of nickel sulphides within a classic Kambalda-style setting including an intercept of 20 metres at 0.62% nickel including 4m at 1.41% nickel.
Southern Cross Goldfields managing director Glenn Jardine said the company was very pleased to have concluded a nickel rights agreement with Western Areas, which he described as a dominant and highly successful nickel sulphide explorer and producer in the region.
“The agreement will ensure that appropriate focus and resources are allocated to testing the nickel potential of the Marda and Southern Cross tenements by Western Areas,” Jardine said in the ASX announcement.
“It provides SXG shareholders with a highly leveraged exposure to any exploration success across much of SXG’s extensive tenement holding.
“In addition, it allows SXG to maintain its focus on its gold production and consolidation strategy in the region at a time of historically high gold prices.
“The agreement has been structured in such a way that SXG retains exposure to any future nickel exploration upside by retaining a 30% interest in any nickel mineralisation discovered.
“That is consistent with our focus as an emerging gold exploration and development company in the region while ensuring that we maximise the value of all of our mineral assets in the area.”