Exploration firm Cassini Resources has agreed to acquire the West Musgrave project in Western Australia, from BHP Billiton.
The West Musgrave project area includes the Nebo and Babel sister deposits, the Succoth advanced copper exploration prospect as well as several prospective exploration targets.
The Nebo-Babel nickel-copper sulphide deposit has a current inferred resource of 446 million tonnes (Mt) grading at 0.33% nickel and 0.35% copper, for 1.47Mt of contained nickel and 1.56Mt of contained copper.
Western Mining first identified Nebo-Babel in 2000, when the discovery hole intersected 26.55m at 2.45% nickel, 1.78% copper, and 0.74g per tonne of platinum elements with gold.
BHP Billiton acquired Western Mining in 2005 and retained the Nebo-Babel deposits to perform work that was focused on a large-scale, low-grade production model.
Cassini Resources managing director Richard Bevan said Nebo-Babel was a prominent discovery for Western Mining in the early 2000s and that it is regarded as a world-class deposit.
"As a smaller company, we can apply a different, innovative approach to these assets, focusing on higher-grade opportunities, with the aim of progressing their development to production as a priority," Bevan said.
Apart from Nebo-Babel and Succoth, the acquisition includes a drilling and geochemical database, which confirms regional exploration prospectivity.
Under the terms of the agreement, Cassini will make a A$250, 000 cash payment to BHP, of which 10% has already been paid.
Cassini will also provide a 2% net smelter royalty on all net proceeds from future production, as well as a production milestone payment of A$10m, due 12 months after the first production.
Cassini said it will now look to undertake resource definition drilling to infill known higher-grade zones, to build a higher-grade subset to the overall Nebo-Babel mineral resource.
The company noted that the outcomes of the programme will determine future development scenarios.
Image: BHP Billiton's West Musgrave project identifying major deposits and prospects. Photo: courtesy of Cassini Resources.