Lithium Australia (ASX: LIT) and Australian Vanadium (ASX: AVL) have teamed up, along with private entity Mercator Metals, to explore for nickel, copper and platinum group elements (PGE) along the Coates Mafic Intrusive Complex which hosts Chalice Gold Mines’ (ASX: CHN) Jupiter project and its recent “significant discoveries”.
Lithium Australia, Mercator Metals’ and Australian Vanadium’s tenements adjoin each other on the complex and will now be known collectively as the Coates project.
The project is about 55km from Western Australia’s capital Perth and only 29km south-west of Chalice’s recent nickel-copper-PGE discovery.
Earlier this week, Chalice reported further assays from its discovery at Julimar which confirmed “consistent high-grade” nickel, copper and PGE in fresh rock.
The latest intersection was 75.1m at 6.2 grams per tonne palladium, 1.7g/t platinum, 1.7% nickel, 0.7% copper and 0.10% cobalt from 34.9m.
“Chalice’s recent discovery of significant nickel-copper-PGE mineralisation at the Julimar project highlights the potential for additional discoveries in similar geological environments, and the Coates Mafic Intrusion, being so close, provides a tremendous opportunity,” Lithium Australia managing director Adrian Griffin said.
Meanwhile, Australian Vanadium managing director Vincent Algar noted the discovery had generated a lot of interest in the region.
“The strategic alliance today is intended to streamline exploration processes through seamless and efficient use of personnel and capital,” he added.
Under the letter of understanding, Australian Vanadium, Lithium Australia and Mercator anticipate jointly exploring and potentially mining the project may have cost and efficiency benefits for all parties.
The deal assumes each party will “generally be responsible for its own costs” and endeavour to keep its tenement in good standing for the duration of the agreement.
Where there is a benefit for the parties, the companies may develop a joint dataset, combine mobilisation costs for exploration, share marketing activities and third-party joint venture party agreement documentation.
Costs will be “borne equitably”.
Additionally, the three parties envisage attracting a senior partner for the project, with the tenements remaining open to a joint venture development or combined sale.
Advancing the Coates project
All-up, the combined exploration licences for the three parties cover 59 square kilometres in the Shire of Northam.
Initial work on the asset will involve compiling and sharing data including historical information, with the objective of building a single modern dataset that has identified potential hosts for base metal and PGE mineralisation.
Following this phase, sampling and field mapping will be undertaken to produce an up-to-date geochemical and geological map.
The companies are also evaluating the benefits of using ground electromagnetic geophysical surveys to identify sulphide-rich horizons.
With the exploration time-frame dependent on permitting, Australian Vanadium and Lithium Australia anticipate drilling will begin in the September quarter.