Magmatic and Fortescue Forge Alliance for Copper Prospect in NSW
Magmatic and Fortescue Forge Alliance for Copper Prospect in NSW

Magmatic and Fortescue Forge Alliance for Copper Prospect in NSW

  • 08-Mar-2024 2:19 PM
  • Journalist: Emilia Jackson

The announcement of a farm-in and joint venture agreement between ASX-listed junior Magmatic Resources and iron-ore major Fortescue Metals triggered a remarkable surge in Magmatic's share price, soaring by over 50% on Friday. This strategic collaboration revolves around the exploration of the Myall project, situated in New South Wales, with a primary focus on uncovering copper/gold mineralization within a geological context akin to Evolution Mining's nearby Northparkes mine.

The Myall project exhibits several characteristics indicative of a Tier 1 copper/gold deposit, prompting Magmatic to seek a partnership with a major player to propel the project's advancement following the maiden resource assessment. Over the course of the past two years, Magmatic has conducted extensive exploration activities within the Corvette and Kingswood prospect areas of the Myall project. These efforts culminated in the delineation of an initial mineral resource estimate for the region, estimating a considerable resource base of 110 million tonnes, boasting copper grades of 0.27%, along with 0.07 grams per tonne of gold and 0.8 grams per tonne of silver.

In addition to the joint venture agreement, Fortescue has also committed to a strategic investment in Magmatic, acquiring approximately 75.9 million shares and thereby securing a significant stake in the company. This cornerstone investment by Fortescue not only underscores the confidence in Magmatic's prospects but also provides the necessary financial impetus to expedite the progress of its other projects, particularly the Wellington North and Parkes projects. These projects hold strategic significance, positioned in close proximity to Alkane Resources' Boda-Kaiser deposits and Tomingley Gold Operations, respectively.

As part of the agreement, Fortescue stands to earn an initial 51% interest in the Myall project by undertaking exploration expenditure totaling A$6 million during the initial earn-in period, spanning up to four years. This entails a minimum expenditure of A$3 million on exploration activities within the first two years. Subsequently, Fortescue has the opportunity to further increase its stake by an additional 24%, bringing its total interest to 75%, upon fulfilling additional exploration spending requirements amounting to A$8 million over an extended two-year period.

The collaboration between Magmatic Resources and Fortescue Metals represents a strategic alignment of interests aimed at unlocking the significant potential inherent in the Myall project. Leveraging Fortescue's expertise, resources, and financial backing, Magmatic is poised to accelerate the exploration and development efforts, with a view to realizing the full value of the project's rich resource endowment. This partnership not only underscores the importance of collaboration in the resource exploration and mining sector but also signifies a significant milestone in Magmatic's journey towards becoming a prominent player in the Australian mining landscape.

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