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Tasman Resources and Fortescue Metals subsidiary FMG Resources have received South Australian ministerial approval for the farm-in and joint venture (JV) agreement over exploration licence 5499.

Exploration licence 5499, owned by Tasman, contains the Vulcan iron oxide-copper-gold-uranium (IOCGU) prospect.

It adjoins the tenement containing BHP Billiton’s Olympic Dam deposit and contains the two demonstrated IOCGU systems Vulcan and Titan, in addition to other prospects.

Tasman executed a conditional farm-in and JV agreement over the exploration licence with FMG in June.

Under the agreement, Fortescue can earn a 51% beneficial interest by sole funding A$4m ($2.7m) within three years.

Fortescue can only withdraw after a minimum expenditure of A$1m ($0.67m). If the company withdraws before an expenditure of A$4m ($2.7m), it will not receive the interest.

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After the claim of its interest, Fortescue can increase it to 80% with a sole expenditure of A$7m ($4.71m) for another five years. Should it withdraw before an expenditure of A$7m, the interest rate will remain at 51%.

Fortescue will act as the manager during the JV period while earning interest.

At present, Tasman holds three exploration licences in the Olympic Province, Stuart Shelf in South Australia. The Olympic Province has a high probability of IOCGU discoveries as it contains the Prominent Hill, Olympic Dam and Carapateena IOCGU deposits.

The first drill hole in the Vulcan was drilled by Tasman in 2009 to a depth of 870m. The company drilled seven additional holes between 2009 and 2011.