Mandrake Resources (ASX: MAN) has signed a farm-in agreement with Andean Energy Resources Pty Ltd over the highly-prospective Jimperding project targeting nickel, copper and platinum group elements in the Jimperding metamorphic belt, 70 kilometres north-east of Perth.
Under the terms of the agreement, Mandrake will make a $40,000 cash payment to Andean and expend a further $100,000 in exploration activities to earn an initial 51% interest in the project.
An additional $200,000 spend will be required for Mandrake to increase its equity to 80%.
Andean will be free-carried through to the commencement of a bankable feasibility study, at which point the companies will form a joint venture to proceed to development.
Mandrake is able to withdraw from the deal at any time prior to earning its first equity stake.
The Jimperding project lies approximately 30km east of the high-grade Julimar nickel-copper-PGE discovery announced last month by Chalice Gold Mines (ASX: CHN).
Julimar is one of Chalice’s generative exploration opportunities where a maiden drill hole intersected a thick zone of massive nickel-copper-PGE rich sulphides at a shallow depth of 48m.
The Jimperding metamorphic belt is in the northern part of the south-west region of the Yilgarn Craton and comprises Archaean gneisses, arkosic paragneiss and banded-iron formation, interleaved with a variety of garnetiferous orthogneiss and ultramafic units.
Historic regional work suggested some of the mafic and ultramafic bodies in the terrane may be remnants of larger layered intrusives and targets for PGEs.
Mandrake said Julimar appears to validate this assessment.
Previous exploration over the 140 square kilometres of the Jimperding exploration licence was conducted in the late 1970s by North Flinders Mines and Australian Anglo American.
Surface sampling and mapping by North Flinders at the project’s Newleyine prospect returned assay values of up to 0.52% nickel and 805 parts per million copper.
Meanwhile, three exploratory diamond drill holes by Australian Anglo established the presence of widespread nickel-copper-iron sulphide mineralisation at 0.24% nickel and 172ppm copper over drill widths of up to 240m.
In 1996, further exploration by BHP (ASX: BHP) near the Mt Pleasant prospect identified anomalous nickel mineralisation within a 10km-long, north trending mafic amphibolite.
Andean has commenced discussions with landholders in the area to secure access for exploration activities.
Once the farm-in agreement has been finalised, Mandrake will conduct field assessments to validate work completed to date at Newleyine and Mt Pleasant.
The company also plans to conduct further ground-based investigations and geophysical work targeting intrusive complexes, funded by $3.6 million cash at hand.