The Paterson Project is a large 423km² tenement in the emerging Paterson Province of Western Australia. The project contains similar geology to Newcrest Mining’s world class 32Moz Telfer gold deposit and is located only 25 kilometres to the north-west of Telfer and 50 kilometres south-east of Rio Tinto’s exciting Winu copper-gold discovery (Figure 1).
A farm-in agreement was entered into with Rio Tinto Exploration Pty Limited (“RTX”) in June 2018, under which RTX is earning an initial 70% interest in the Paterson Project.
Paterson Province, Western Australia
Historically very little exploration has occurred at the project save some historic first pass copper and gold results from the 1990’s. These will now benefit from modern exploration and geological models with RTX expected to use their unique local knowledge of the region to test high priority exploration targets for the first time in 20 years. Recent activities undertaken by RTX include; review of historic data, aeromagnetic surveys, earthworks for the camp site, access roads and 8 drill pads complete for target testing.
A drilling programme has been planned for June quarter 2020 to be sole funded by RTX, that comprises a minimum of eight reverse circulation (RC) drill holes of up to 250m depth across 6 copper-gold target areas (Figure 2), with further holes to possibly be drilled subject to results.
This initial testing is intended to guide follow up exploration and improve target generation by confirming basement depths and lithologies. The depth of cover for the initial targets is currently estimated to be 30-100m.
Rio Tinto Exploration Farm-In
In June 2018 Strickland Metals entered into a Farm-In and Joint Venture Agreement with Rio Tinto Exploration a wholly owned subsidiary of Rio Tinto Limited (Rio Tinto).
RTX has the right to earn a 70% joint venture interest in the Tenement by completing the following within 3 years:
- expenditure of at least $500,000; and
- at least 500 metres of drilling on the Tenement.
In the event RTX earns a 70% interest, Strickland Metals will have a First Election to:
- commence contributing in accordance with its 30% participating interest;
- convert its interest to a 1.25% NSR Royalty capped at $15 million (Royalty) plus a right to receive a $1.5 million prepayment of the Royalty upon a decision to mine; or
- not commence contributing to the joint venture and for RTX to continue to sole fund expenditure to earn a further 15% interest.
Should Strickland Metals make the election for RTX to continue to sole fund expenditure, RTX will earn a further 15% joint venture interest after sole funding a further $1 million of joint venture expenditure, such that RTX will then hold an 85% joint venture interest.
Strickland Metals will have a Second Election to either:
- convert its remaining 15% joint venture interest into the Royalty, or
- commence contributing to joint venture expenditure in accordance with its 15% joint venture interest.