Mining

Western Mines Group to sell Pavarotti iron ore rights to Mineral Resources

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By Imelda Cotton - 
Western Mines Group ASX WMG Pavarotti iron ore Mineral Resources

Mineral Resources owns several open pit iron ore mines near to Western Mines’ Pavarotti project.

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Western Mines Group (ASX: WMG) has signed a binding term sheet to sell 100% of the iron ore rights at the Pavarotti nickel sulphide project to Mineral Resources (ASX: MIN).

Consideration for the sale will be $200,000 in cash upfront to Western Mines Group plus a 1.25% royalty in respect of any iron ore extracted and recovered from the tenements.

Mineral Resources may elect to buy-out the royalty, based on an agreed independent valuation, prior to commencement of mining.

The sale is subject to a seven-day legal due diligence period by Mineral Resources, with the cash due within one week of completion.

Other minerals

Western Mines will retain 100% interest in all other minerals relating to Pavarotti project, specifically the nickel-copper-PGE (platinum group elements) potential which it is currently investigating.

Managing director Caedmon Marriott said the transaction would unlock hidden value at the project.

“We are focused on the nickel-copper-PGE potential at Pavarotti and would not really have looked much at the iron ore content,” he said.

“The cash from this sale will go towards expanding the drilling program at our flagship Mulga Tank project which we believe offers potential high-impact returns for our shareholders.”

Site visit

Western Mines visited the Pavarotti site earlier this year to ground truth a number of initial targets and results identified during a historical review of the project in November.

The underexplored Jock’s Fury gossan was located, along with a number of drill holes completed by BHP Group (ASX: BHP) in the 1970s which displayed assays of 4.6m at 1.28% nickel, 597 parts per million copper and 293ppm cobalt from 42.7m to end of hole; and 16.8m at 0.78% nickel, 360ppm copper and 285ppm cobalt from 12.2m including 3.1m at 1.60% nickel, 865ppm copper and 700ppm cobalt from 24.4m.

Also confirmed was the location of anomalous rock chip results collected in the 1990s, complete with labelled sample numbers still attached to nearby vegetation.

The mapping, sampling and recording of the location of this historical information is expected to aid Western Mines’ ongoing exploration activities.

Koolyanobbing location

The Pavarotti project is located on the western side of the Koolyanobbing Greenstone Belt, which is a northwest trending sequence of mafic and ultramafic volcanic and intrusive rocks with lesser sediments intercalated with banded iron formation (BIF) horizons forming prominent ridges.

The BIF horizons have been exploited since the 1960s, with several open pit iron ore mines that are currently owned by Mineral Resources.