Fortescue and Magmatic Resources partner up for Myall project
Magmatic Resources (ASX: MAG) and FMG Resources — a subsidiary of Fortescue (ASX: FMG) — have executed farm-in and joint venture agreement at the Myall project.
Located in central NSW, the project comprises of a continuous 244sqm tenement which covers the northern extension of the Junee-Narromine volcanic belt. It hosts significant porphyry-associated copper-gold mineralisation and has a mineral resource estimate of 110mt at 0.27% copper, 0.07g/t gold and 0.8g/t silver.
Fortescue can earn an initial 51% interest in the Myall project by spending $6m in exploration across a four-year period. FMG can then earn an additional 24% interest (for a total interest of 75%) by spending an extra $8m in exploration over a further two years.
During the initial earn-in period, Magmatic — via its wholly-owned subsidiary MOD — will operate and undertake all exploration activities. Once FMG earns a 51% interest, it will solely fund and manage exploration activities.
Magmatic executive chairman David Richardson says the company is excited to partner with Fortescue.
“We are excited to joint venture and partner with Fortescue to advance our exploration efforts across the Myall project area,” he said.
“Myall has many of the signatures of a tier one copper-gold deposit and Magmatic has recognised the need to partner with a major to further advance the project following the maiden resource.”
Additionally, Fortescue will make a strategic investment and subscribe for 75,946,151 Magmatic shares to hold a 19.9% stake.
Fortescue has the right to appoint one nominee director to Magmatic’s board and if its interest increases to above 20%, the company has the right to appoint an additional nominee director to the board.
“Fortescue’s cornerstone investment in MAG will allow the company to simultaneously advance our other two projects at Wellington North and Parkes which are strategically located near Alkane Resources’ Boda-Kaiser deposits and Tomingley gold operations respectively,” Mr Richardson said.
