JOHANNESBURG (miningweekly.com) – ASX-listed minerals exploration company Red Metal has signed an option and joint venture (JV) agreement with MMG Exploration – a subsidiary of midtier global resources company MMG Limited – to advance the prospective Mallapunyah zinc project in the McArthur basin, in Australia’s Northern Territory.
Under the agreement, MMG will finalise land access negotiations towards the grant of the tenement. Once granted, MMG will have the right to earn 70% of the project by completing a bankable feasibility study within seven years. Red Metal will be free carried to a decision to mine.
During the option period, MMG can vest a 60% interest in the project by spending $4-million within the first five years from the grant of the tenement and electing to advance the project towards feasibility. MMG has committed to a minimum exploration expenditure of $250 000 a year during this time.
Red Metals said in a stakeholder update on Monday that it was excited by MMG Exploration’s entry into the project, as it believes Mallapunyah holds much promise.
MMG brings strong local mining expertise to the JV, having recently commissioned the large Dugald River zinc/lead/silver mine, in north-west Queensland, and owned the giant Century zinc/lead/silver operation in the state. Further, MMG has active zinc exploration programmes in the region, as well as positive working relationships with the local communities.
Exploration on the Mallapunyah project targets zinc/lead/silver deposits similar to the giant McArthur River and Century mines, as well as sedimentary-hosted styles of copper mineralisation.