Western Australian explorer Encounter Resources (ASX: ENR) has welcomed a new partner and major shareholder to help advance its Yeneena copper-cobalt project in the state’s Paterson province.
The company today announced fellow Australian mineral explorer Independence Group (ASX: IGO) has subscribed for a placement of 24 million ordinary shares at a premium price of $0.075 to raise $1.8 million.
Encounter said at least 80% of the funds will be used to progress the Yeneena project, with a technical committee forming to equal represent Encounter and Independence in the design of exploration activities.
As a new major shareholder, Independence also has until March 2020 to elect to enter an earn-in agreement, under which it can earn up to 70% interest in Yeneena by spending $15 million over seven years. The company may also elect to manage the project during this earn-in period.
Upon completing the earn-in, a 70/30 joint venture will be formed, with each company contributing funds based on their respective interests.
Encounter managing director Will Robinson described Independence as a “highly successful” and “highly respected” exploration and mining company.
“Their support for Encounter is confirmation of the quality of Encounter’s exploration team, strategy and portfolio of projects,” he said.
Independence currently wholly-owns and operates the Nova nickel-copper-cobalt operation in Western Australia and the Raptor nickel-copper-cobalt exploration project in the Northern Territory.
It is also involved in joint ventures including earning a 30% stake in AngloGold Ashanti’s (ASX: AGG) Tropicana gold mine.
Yeneena copper-cobalt project
The Yeneena project covers a 1250sq km area of the Paterson province, including a 70km long corridor south of Metals X’s (ASX: MLX) large Nifty copper deposit.
The province is also currently being explored by mining majors including Rio Tinto (ASX: RIO), Newcrest Mining (ASX: NCM) and Fortescue Metals (ASX: FMG), as well as junior explorer Antipa Minerals (ASX: AZY), which recently hit high-grade copper-silver-gold-mineralisation while drilling at its North Telfer project.
Encounter has identified a 14km long copper-cobalt system at Yeneena, including a coherent zone of near-surface copper oxide mineralisation with best intersections including 10m at 6.8% copper from 32m and 20m at 2% copper from 22m.
The area also contains a number of high-grade cobalt intersections including 9m at 1% cobalt and 1.5% copper from 42m, and 14m at 0.45% cobalt and 0.38% copper from 14m.
A $1.6 million exploration program is being planned for the project for 2019, of which will be funded by the recent share placement.
Encounter shares surged 90% to $0.076 on the news by early afternoon trade.