Minotaur Exploration (ASX: MEP) has entered into a binding heads of agreement with Andromeda Metals (ASX: ADN) to farm into a 75% stake in two tenements south-west of Tennant Creek in the Northern Territory.
Minotaur can take up to 60 days to conduct its due diligence of the parties’ proposed joint venture and must spend A$2 million within three years on exploration to earn a 51% interest in the Rover copper-gold project.
To earn its maximum interest of 75% in the Rover venture over a six-year period, Minotaur must spend another A$3 million.
If Minotaur opts to back out in the first nine months, it must spend at least A$400,000 before withdrawing.
Andromeda managing director Chris Drown said the deal would result in the “implementation of a reinvigorated exploration effort on the highly prospective Rover landholding.”
“Minotaur’s first on-ground exploration at Rover will commence next week with a trial electromagnetic survey to be undertaken to determine if the technique has application in the Rover field,” he said this morning.
Mr Drown highlighted the quality of Andromeda’s new farm-in partner, saying Minotaur was a “successful and highly regarded mineral exploration group” and pointing to its discovery of the world-class Prominent Hill copper-gold deposit in 2001.
“(Minotaur) specialises in the search for iron-oxide hosted copper gold deposits such as those which occur at Rover,” Mr Drown noted.
Minotaur will operate the joint venture when it is solely contributing or if holding a major stake.
Minotaur is the larger of the two companies, having a market capitalisation of A$19.69 million today, with Andromeda extending to A$6.27 million today after gaining this morning.
The Rover project hosts magnetic anomalies prospective for Tennant Creek style targets along a 20km corridor.
Andromeda has reported drill intersects of 55m at 3.36% copper and 0.16 grams per tonne gold from 357m, 15m at 2.07% copper and 0.15g/t gold from 221m, and 17m at 0.76% copper and 0.02g/t gold from 417m.
Minotaur said today it would use geophysical methodologies to target the entire mineralised structure.
Andromeda gained 14.3% to A$0.008 while Minotaur was up 2.56% to A$0.08.