Australian mineral explorer Strategic Energy Resources (SER) has reached a joint venture (JV) and farm-in deal with Fortescue Metals Group subsidiary FMG Resources to explore the Canobie project in Queensland, Australia.
The Canobie project includes several claims, covering 1,800km² within the Mt Isa Eastern Succession.
The site is said to be ‘highly prospective’ for iron oxide copper-gold (IOCG) and magmatic nickel sulphide due to its closeness to major structures such as the Quamby Fault Zone and Gidyea Suture Zone.
The fault systems host significant copper-gold deposits, including the Ernest Henry mine and the Mount Margaret, Eloise and Roseby deposits.
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According to the JV and farm-in agreement, FMG can earn up to a 51% stake in the project by spending $4m on exploration, including a minimum of 3,000m of basement drilling within the first three years.
There is a minimum obligation to spend $2.5m (A$3.75m) on exploration within the first two years.
In the first stage, SER will operate and conduct all exploration activities as directed by an exploration committee, which will include two members from each company.
In the second stage, FMG can earn an additional 29% stake if it incurs another $4m on exploration for a further three years. This will bring its total stake to 80%.
The exploration will also include at least 3,000m of basement drilling.
Both companies can agree to co-contribute towards the expenditure after FMG completes the first stage.
If SER selects not to contribute, the JV will be diluted as per the industry formula.
SER managing director David DeTata said: “We are excited to partner with Fortescue in the search for copper and nickel across the Canobie Project. SER has already demonstrated the potential for IOCG and magmatic nickel at Canobie, and with Fortescue’s support, together, we are now able to systematically test multiple drill targets within the project.
“Furthermore, appointing SER as operator shows strong support for SER’s ability to execute work programmes and will enable SER to also benefit from Fortescue’s substantial technical and operational capability.”