LCL Resources (ASX: LCL) has executed a binding Tenement Sales Agreement with unlisted public PNG exploration company Papuan Minerals Limited to acquire 100% ownership of exploration licences EL 2391 and EL 2560.
When combined with LCL’s existing exploration licences, applications and agreement to acquire EL 2566 from Munga River Ltd, acquisition of the Papuan Licences secures LCL’s control of a significant region prospective for nickel mineralisation.
EL 2391 contains the Doriri Ni-Pd-Pt-Co target located 10km from LCL’s Veri Veri Nickel Project.1 Equi-distant between Doriri and Veri Veri is the Iyewe nickel target on EL 25662. The close proximity of the three targets, each residing in ultramafic intrusive (typically dunite) lithologies of the Papuan Ultramafic Belt (PUB) proximal to the Keveri Fault Zone, is a compelling and priority regional target for nickel sulphides.
The company has commenced a detailed review of the Papuan Licences and will subsequently provide further details of targets and prospectivity once the information is confirmed to JORC 2012 standard.
The agreement permits LCL to acquire each of EL 2391 and EL 2560, with the acquisition of EL 2560 conditional upon its renewal. Completion of each acquisition is also subject to the transfer of titles of each of the Papuan Licences to LCL. The application for renewal of EL 2560 is currently with the relevant authorities.
Key elements of the transaction include:
1. Issue of 7,239,382 fully paid LCL ordinary shares to Papuan on completion of the transfer of EL 2391 to LCL.
2. Issue of 2,413,127 fully paid LCL ordinary shares to Papuan on completion of the transfer of EL 2560 to LCL.
3. Grant of a 2% NSR (Royalty) to Papuan on minerals extracted from the Papuan Licences. LCL has the right to purchase, at any time, the Royalty over EL 2391 for a cash payment of AUD$3.75M; and the Royalty over EL 2560 for a cash payment of A$1.25M.
4. Completion is conditional on due diligence by LCL on the Papuan Licences, to its reasonable satisfaction, within 30 days of signing and LCL may withdraw from the Agreement if completion of the transfer of either of the Papuan Licences does not occur within six months of execution.
We now hold the dominant position across the ultramafic lithologies in the south of PNG,” LCL’s Managing Director, Jason Stirbinskis, said.
“These units are highly prospective for nickel mineralisation as evidenced by our Veri Veri nickel sulphide project, the established Iyewe and Doriri targets and large nickel stream sediment anomalies at Wedei and Safia. We also note the potential for nickel laterites, particularly in the northern region, near the advanced Wowo Gap Nickel Project, north-east of our boundary.
“The company has commenced a detailed review of the Papuan Licences and is assimilating the data into our regional targeting models. We now have a 3,400 sq. km parcel of ground in southern PNG which captures prime nickel sulphide and laterite targets.
“Our footprint also captures over 130km of the Keveri Fault Zone, an established controlling structure for known nickel sulphide mineralisation within Papuan Ultramafic Belt lithologies. Copper-gold mineralisation at the Company’s Ubei and Liamu projects and the Urua Cu-Au complex, acquired in the Papuan transaction, are also interpreted to be controlled by elements of the Keveri Fault Zone.”