Sheffield Resources has entered a joint venture agreement with Independence Group (IGO) to explore the Fraser Range region located in Western Australia.
The agreement includes four granted tenements, E69/3052 and E69/3033 (Red Bull), E39/1733 (Big Bullocks), E28/2374-I (Bindii) and ELA69/2563 (Similkameen).
IGO owns a nickel mine in the Fraser Range with significant exploration interests.
Sheffield Resources managing director Bruce McFadzean said: “We are very pleased to have formed the Fraser Range joint venture with IGO. They are a well-funded, dedicated nickel explorer and their ownership of the Nova mine underpins a long-term commitment to the region.
“The joint venture allows Sheffield to retain significant exposure to exploration success in the Fraser Range, should the company contribute to its 30% interest beyond the initial earn-in phase. The up-front cash payment of $500,000 is a welcome addition to our cash reserves, and follows the $17.1m capital raising completed last quarter.
“It is pleasing to have a high-quality partner in IGO carry the project forward, enabling us to focus on the Thunderbird mineral sands project.
“The company is due to deliver the Thunderbird BFS in the first quarter of 2017, and has commenced offtake and financing negotiations as a part of the development of this tier 1 mineral sands asset.”
According to this agreement, IGO will receive 51% interest in the project by paying $500,000. It can also earn an additional 19% interest by funding $5m within five years from the date of commencement of the JV.
After the agreement becomes effective and until the completion of feasibility study, IGO can further acquire an additional 5% of the project by paying $10m or equivalent in IGO shares.
Image: Location of Sheffield-IGO JV tenements in the Fraser Range. Photo: Courtesy of Igo.com.au