Okapi Resources signs gold joint venture with Lithium Australia, acquires Mount Day gold project
Okapi can secure 75% of the gold and base metal rights of Lithium Australia’s Maggie Hays tenements by spending $1.19 million on exploration within 60 months.
Gold-focused explorer Okapi Resources (ASX: OKR) has entered into a farm-in agreement with Lithium Australia (ASX: LIT) to earn an undivided 75% in mineral rights (other than lithium) over the Maggie Hays tenements in WA’s Lake Johnston greenstone belt.
Under the terms of the agreement, Okapi will pay Lithium Australia a $20,000 upfront deposit to secure the deal and invest a minimum $150,000 in tenement exploration.
The company will be granted 40 days to complete legal and technical due diligence, after which point it may exercise the option to proceed with the farm-in.
If it decides to proceed, Okapi could earn its 75% interest in Maggie Hays by investing a further $1.19 million on exploration within 60 months of the option date.
Once the interest is earned, Okapi must free-carry Lithium Australia until completion of a definitive feasibility study on the Maggie Hays tenements.
Lithium Australia managing director Adrian Griffin said the joint venture with Okapi was “great step” for the company in adding value to its exploration assets.
“The joint venture with Okapi provides Lithium Australia shareholders with upside for gold and base metal discoveries while retaining 100% of the lithium potential.”
“This is the best of both worlds,” Mr Griffin added.
Tenement application
Okapi has also lodged a tenement application to secure an underexplored 10km gold-in-soil anomaly within the Mount Day gold project, near to the Maggie Hays and Emily Ann underground nickel mines.
The target area is located at the southern end of the Lake Johnston belt, which hosts the Mount Holland gold mine owned by Wesfarmers (ASX: WES) and the Lake Johnston nickel mines owned by Poseidon Nickel (ASX: POS).
The main target is believed to have a maximum 88 parts per billion gold and is coincident with a structural flexure identified by magnetics.
It straddles the tenement application and the farm-in tenement with Lithium Australia.
Historical rock chip results from the area include grades of up to 10.7 grams per tonne gold.
As part of the application, Lithium Australia will retain a 25% interest in any gold or nickel discoveries on the tenements.
Previous exploration
The Mount Day project area has previously been the focus of nickel and lithium exploration with limited follow-up on the gold potential.
A seven-hole drill program in 2003 by Canadian-based nickel miner LionOre produced assays including 2m at 11.04g/t gold from 28m and 3m at 1.74g/t gold from 74m.
The holes targeted outcropping material and past workings, but excluded the main geochemical target.
Okapi’s team will review the historical data and complete an infill soil sampling program to accelerate definition of gold and nickel targets.
Chairman Rhod Grivas said the Mount Day project acquisition marks a significant step for the company.
“It fast-tracks [us] into an exploration program on an exciting 10km long walk-up gold target in a region with significant gold and nickel potential and limited modern exploration,” he said.