Helix Resources (ASX:HLX) has agreed terms for an Earn-in Joint Venture Agreement with Legacy Minerals (ASX: LGM) to undertake exploration for gold, copper, silver and base metals on its Central Cobar project in NSW.
The two parties have signed a binding agreement setting out the staged earn-in and joint venture terms. The Central Cobar Project on Exploration Licence 9511 covers approximately 308 sq. km in the established Cobar mining region, NSW. It is located approximately 10 km west of Cobar township in NSW in an area which hosts several operating gold, copper and base metal mines.
“This agreement provides Helix with an exciting exploration opportunity located close to operating gold and copper mines and having the potential to discover Cobar-type mineralisation with several, well regarded, un-drilled targets. We are pleased that Legacy has agreed this opportunity and recognised the local expertise that Helix can contribute here. We look forward to working with Legacy to hopefully make a new discovery on this underexplored piece of ground,” Helix’s Managing Director, Kylie Prendergast, said.
Farm-in on the Central Cobar Project
Legacy’s Central Cobar Project (EL9511) is located only 10km from Aurelia’s Peak Gold Mine and 10km from Metals Acquisition Ltd’s CSA Copper Mine. The portfolio of targets in Legacy’s Central Cobar Project, complements Helix’s existing exploration portfolio and provides exposure to additional Cobar-style copper gold base-metal prospectivity in addition to bringing in numerous undrilled targets that can be quickly moved through to drilling.
Legacy has delineated a series of defined Airborne Electromagnetic (AEM) geophysical anomalies.
“Woggle - characterised by a coincident magnetic high and AEM conductor. The Woggle magnetic anomaly is a discrete magnetic high favourably positioned on a rheological contact between the Biddabirra Formation and the CSA Siltstone. The anomaly potentially reflects disseminated magnetic pyrrhotite which is characteristic of alteration halos to Cobar-type deposits. AEM has identified a subtle late time peak anomaly that is coincident with the peak of the magnetic response. Ground truthing has confirmed the response does not appear to be related to a cultural feature and sits in an area of thin colluvial cover.
Furthermore, a series of AEM anomalies have been identified which are spatially associated with the regional Myrt Fault. It is a major NNW-SSE trending structure which can be delineated undercover from airborne magnetic data. These anomalies are beneath thin colluvial cover sediments that can mask geochemical responses of buried deposits. The high priority AEM anomalies identified by the Company, are characterised by discrete and moderate-to-late time conductive responses that may be along strike of, or adjacent, to nearby anomalous geochemistry and sit in structural locations interpreted to be interpreted to be favourable for Cobar-type ore deposits.
Key Earn-In Terms
Helix and Legacy have executed a binding Letter Agreement which sets out the staged earn-in and potential joint venture terms as summarised below:
- Helix Resources can spend A$2.8 million to earn an 80% interest in EL9511 in three stages:
o Stage 1 – $0.8 million over 2 years to earn a 51% interest;
o Stage 2 – $0.8 million over 2 years to earn a further 14% interest; and
o Stage 3 - $1.2 million over 2 years to earn a further 15% interest (up to 80%).
- Minimum commitments include geophysics and 700m of drilling within 12 months.
At each stage, LGM has the option to contribute or dilute, and if LGM’s dilute interest drops below 10%, it will
convert to a 2% gold Net Smelter Royalty (NSR) or a 1.2% NSR if base metal dominant.
Next Steps
Refine and test drill targets: Helix is in the process of planning ground geophysical surveys over up to three of the highest priority AEM targets (Woggle, Xcite 6, 40060A). Drill planning will be undertaken in parallel and commence as soon as possible subject to weather and contractor availability.
Follow-up AEM and geochemical targets: multiple other targets have been generated by Legacy which will be systematically evaluated by Helix with field work, auger geochemical sampling and geophysics.
