Junior exploration company Buxton Resources (ASX: BUX) has entered into an agreement with New World Cobalt (ASX: NWC) to acquire the West Kimberley nickel-copper-cobalt project in the north of Western Australia.
The project comprises three tenements over 552 square kilometres adjacent and contiguous to Buxton’s Merlin prospect within the Double Magic nickel-copper project, within what the company believes is “a de-risked, fertile and unexplored new nickel-copper-cobalt-PGE province”.
The acquired acreage contains the north-western continuation of the geological sequence which hosts Merlin and is considered highly-prospective for additional nickel-copper-cobalt sulphide mineralisation within the Ruins Dolerite formation.
Under the terms of the West Kimberley agreement, Buxton will acquire a 100% interest in E04/2423 and the right to acquire an 80% interest in E04/1972 and E04/2314.
In consideration, Buxton will issue NWC with 1,333,333 fully paid ordinary Buxton shares on completion.
A tranche of shares to the value of $250,000 will be issued to NWC within five days of Buxton’s drilling program at West Kimberley intersecting a pre-determined grade-thickness of nickel mineralisation.
Another tranche to the same value will be issued to NWC within five days of Buxton announcing a JORC-compliant resource (inferred, indicated and/or measured; of any size and/or grade; for any commodity) at the project.
Where the resource exceeds 15,000 tonnes of contained nickel equivalent and within five days of making such an announcement, Buxton will pay NWC a final tranche of shares to the value of $500,000.
In each case the number of shares issued to NWC will be based on the 10-day volume weighted average price prior to the date on which each relevant milestone is met.
The West Kimberley divestment allows New World to focus on the exploration and development of its cobalt projects in North America while retaining exposure to the project by holding an equity interest in Buxton.
The project acquisition means Buxton now holds the majority of the Ruins Dolerite trend within West Kimberley belt.
Buxton continues to report positive progress during exploration drilling at the Merlin prospect.
The first hole drilled for the 2018 field season intersected well-developed brecciated massive sulphide within a 44 metre interval of mineralised sequence.
All holes since then have intersected visible nickel-copper sulphide mineralisation, including numerous occurrences of brecciated massive sulphide with coarse pentlandite and chalcopyrite.
Drilling at Merlin has been temporarily halted while the company awaits the receipt of assays and results from a recent round of downhole electromagnetic surveying.
DHEM surveying has been considered a critical targeting tool for defining accumulations of highly-conductive massive nickel-copper sulphide mineralisation at the prospect.
At midday, shares in Buxton Resources were trading 12% higher at $0.140.