PERTH (miningweekly.com) – The shareholders of ASX-listed Havilah Resources have approved the grant of an option to fellow listed Oz Minerals to acquire the Kalkaroo copper/gold/cobalt project, in South Australia.

The two companies earlier this year inked a term sheet over the project, giving Oz Minerals 18 months in which to evaluate the potential of the Kalkaroo project, and the option to acquire the project for A$205-million.

The Kalkaroo project, which is at prefeasibility stage, consists of a mineral resource estimate (MRE) of 245-million tonnes at 0.45% copper and 0.39 g/t gold, for 1.1-million tonnes of copper, 3.1-million ounces of gold and 23 200 t of cobalt.

In addition to the acquisition of Kalkoora, the term sheet also covered a potential strategic alliance over the Curnamona province, in South Australia.

Under the Strategic Alliance, Oz Minerals will pay Havilah A$1-million a month during the option and alliance period, with 50% of the payments directed towards Havilah identifying and advancing nearby exploration opportunities within the Curnamona province.

Including the monthly payment, Oz Minerals expects to spend up to A$76-million during the Option and Alliance Period to undertake studies and for exploration activities at the Kalkaroo project and on alliance activities.

“Havilah is delighted to be working on the Kalkaroo project with Oz Minerals, who are recognised as a highly successful South Australia-based copper mine developer and operator,” said chairperson Simon Gray.

“We have great faith in the copper credentials of the Curnamona province and feel the proposed strategic alliance is the best way to realise the potential of this highly prospective, but under-explored geological terrain for the benefit of all stakeholders.”

Oz Minerals has welcomed the shareholder approval, with CEO and MD Andrew Cole saying on Wednesday that the Kalkaroo project provided the opportunity to add one of Australia’s largest undeveloped copper/gold deposits to Oz Minerals’ organic growth pipeline, complementing existing expansions at the Carrapateena and Prominent Hill operations, and the greenfield West Musgrave project.

“Since the proposed transaction was announced in May, our project team has been planning work programmes, engaging with suppliers, and working closely with the Havilah team to enable the study to commence immediately upon Havilah shareholder approval,” said Cole.

“The study, to be conducted over the 18-month option period, will focus on opportunities to identify additional value by assessing a range of modern mining opportunities, innovation, processing, improvements and local infrastructure that reduce project costs and improve productivity.

“The aim of the study is to improve our understanding and confidence in the project, and it will include an infill drilling programme to confirm the current MRE, prior to making a decision whether to exercise the option to acquire the Kaklaroo project.”

Cole said that if the option was exercised, timing for the development of the project would remain at Oz Minerals’ discretion.