AusQuest carrying out works at its Fraser Range prospects. Image: AusQuest.
By Elizabeth Fabri
SOUTH32 has signed an agreement with AusQuest to develop high-potential exploration opportunities in Australia and overseas targeting copper, zinc and nickel.
Under the deal, South32 would fund exploration activities over at least five AusQuest projects in Australia and Peru, which would be offered exclusively to South32 over a three year time frame, subject to financial conditions.
Projects of interest included Jimberlana and Balladonia/Gibson Soak nickel-copper projects and the Blue Billy Project in WA, and Chololo and Los Otros porphyry copper prospects in Peru.AusQuest said a work program and budget to advance each project to a drill-ready stage would be agreed by the parties and South32 would make payments of at least $US250,000 per project up to a maximum of $US500,000.
Programs costing more than $US500,000 could be undertaken with agreement of both parties, with funding above $US500,000 reducing the $US4.05m expenditure required under the Joint Venture Agreement for South32 to earn a 70 per cent interest in each project.
To earn an 80 per cent interest in a project, South32 would also have to complete a pre-feasibility study.
“We are looking forward to working with AusQuest on potential opportunities to generate low cost entry points for early stage exploration, outside our existing portfolio,” South32 chief executive Graham Kerr said.
AusQuest managing director Graeme Drew said the alliance would leverage its skills as an explorer and was a unique opportunity for the company to work alongside one of the world’s most diversified miners.
“The agreement is structured to give AusQuest the financial capability to identify and evaluate opportunities as well as rewarding the company for success along the way,” Mr Drew said.
“The immediate injection of exploration funds across a number of projects in our portfolio will allow us to get on with the job of generating and evaluating prospects, advancing them to drill-ready status which is where the real value will be.
“We are looking forward to working with South32 to build a quality pipeline of exploration opportunities.”