OZ Minerals joins Resolution in its hunt for copper at Wollogorang
OZ Minerals will spend $4.9 million on exploration at Wollogorang over five years to earn an initial 51% interest.
Copper-gold miner OZ Minerals (ASX: OZL) will farm into Resolution Minerals’ (ASX: RML) Wollogorang copper project in the Northern Territory under a new agreement that Resolution managing director Duncan Chessell says recognises the project’s copper potential.
The agreement paves the way for OZ to earn up to 51% of the project by spending $4.9 million over five years.
Resolution will remain project operator during the farm-in period and may elect to retain its 49% by participating in exploration from year six.
If Resolution elects not to retain the 49% stake, OZ has the option to up its stake to 75% in the project by sole-funding and delivering a final investment decision to mine at the project.
To secure the extra 24% interest, OZ must spend at least $1 million a year for five years on advancing the project.
“This is a very exciting development for Resolution’s shareholders,” Mr Chessell said.
“The joint venture agreement with OZ is recognition of the copper prospectivity of the Wollogorang project.”
Wollogorang project
Wollogorang covers a massive 3,825 square kilometre footprint in the Northern Territory’s McArthur Basin.
Early last month, Resolution reported a versatile domain electromagnetic (VTEM) survey had led to the identification of 40 conductors across the project.
Commenting on the VTEM survey, Mr Chessell said it had generated “better than expected” results.
“The conductors identified could indicate the presence of massive sulphides or rocks that could be excellent trap sites for base metal mineralisation.”
“What has us the most excited now, is that the VTEM has generated dozens of untested new targets.”
Mr Chessell said exploration also aimed to firm up additional areas prospective for disseminated sulphides, which the company will undertake ground induced polarisation geophysics to identify.
Planning is underway for a drilling program to begin within weeks.
“The partnership with OZ has secured long-term funding, technical exploration collaboration and mining expertise to explore the current identified targets with potential to discover the next large-scale copper mine in the Northern Territory,” Mr Chessell said.
Although copper is now the focus, the project hosts the Stanton cobalt deposit which has a resource of 942,000t at 0.13% cobalt, 0.06% nickel and 0.12% copper.
Previous work focused on discrete breccia pipes, with exploration now primarily based on modern geophysics to generate copper anomalies.
Major explorers including Teck Resources (NYSE: TECK), BHP Group (ASX: BHP), Rio Tinto (ASX: RIO), Redbank Copper (ASX: RCP), and South 32 (ASX: S32) hold surrounding ground to Wollogorang.
“The Northern Territory ranks in the top 20 of the best mining jurisdictions in the world by the Fraser Institute (2020) and is relatively underexplored,” Mr Chessell noted.
“Resolution recognises the potential within the Northern Territory to host large-scale undiscovered mines.”