The Morgan Range Project features tenements from Rio Tinto Exploration Limited (RTX) in the West Musgrave belt of WA, just 50km west of the WA/SA/NT border intersection. Strickland Metals own 100% of the project and RTX retain a 60% earn back option that includes $40 million expenditure if a Tier 1 discovery is made.
This emerging region is highly prospective for base metals including nickel-copper-PGM massive sulphides. The project lies just 30km from Oz Minerals Ltd 70% owned West Musgrave JV. The recently released a Nebo-Babel project PFS estimated a 26 year life, open pit mine that makes it the largest undeveloped nickel-copper deposit in Australia.
Warbuton, Western Australia
The host rock of both the Morgan Range project and the camp scale West Musgrave JV is the Giles complex suite of layered mafic intrusives, which occur as discrete tube-like bodies. These intrusive-hosted deposits have similarities to the world-class Voisey’s bay deposit in Canada and the more recent Nova discovery in Western Australia.
The deposits at the West Musgrave JV all fall within 20km of one-and-other and have strong aerial electromagnetic anomaly (TEM) signatures. These anomalies historically have a high correlation with mineralisation, the principal target at the Morgan Range Project is one such strong TEM that falls within the north-east trending mineralisation of the West Musgrave JV discoveries (figure 1).
Airborne electromagnetic surveys over the ground conducted by Falconbridge in 2002 identified a high-priority TEM anomaly that occurs over four 100m spaced lines with high amplitude response, slow decay and is also coincident with a regional gravity anomaly like that of the neighbouring Nebo/Babel discoveries.
This target was never drill tested, as RTX deemed the Morgan Range prospect as just below a Tier 1 priority. RTX wish for the anomaly to be drill-tested to determine if it comes from the same nickel-copper sulphide mineralisation at the Nebo-Babel discovery. Modern day technology has a very good chance to quickly define the best drill site under a thin desert sand covered area, with increased precision.
The discrete nature of the already defined target presents a very fortunate opportunity for the company, as it can be drill tested relatively quickly, meaning it is a low-cost / high-reward discovery opportunity.
Rio Tinto Exploration Agreement
Strickland Metals 100% owned subsidiary Dingo Resources entered into a sale and purchase agreement with Rio Tinto Exploration Pty Ltd (RTX) for 100% rights to the Morgan Range Project.
Under the RTX Agreement, Strickland Metals were required to:
- Pay $50,000 to RTX
- Issue securities having a value equal to $200,000 to RTX at completion
- A of 1.5% on all sales of metal or mineral products produced from the tenement to RTX, and
- Drill test the Morgan Range TEM target with a minimum of 2,000m of drilling with at least one hole to at least 400m depth within 3.5 years from execution.
RTX will have the right to re-acquire (or ‘claw-back’) a 60% unincorporated JV interest in Morgan Range on the definition of a Mineral Resource on the Tenement with an in-situ Value of at least A$1 billion by:
- Reimbursing all of d Exploration Expenditure to date on the Tenement; and
- Undertaking to sole fund the first A$40 million of joint venture expenditure.
Future Exploration Activities
Proceeding data acquisition and review the company will complete a ground inspection of the target area and conduct ground TEM and Magnetic surveying if necessary to refine the target pending all heritage agreements are completed. Modern day technology has a very good chance to quickly define the best drill site under a thin desert sand covered area, with increased precision.
After target definition programs the company will commence a 2,000m RC and Diamond drill program to test the conductor at depth.