PERTH (miningweekly.com) – ASX-listed Havilah Resources has executed definitive transaction documents with fellow listed copper/gold miner Oz Minerals and its exploration arm Oz Exploration over the Kalkaroo copper project, in South Australia.
Under the agreement, Oz Minerals will have 18 months to evaluate the potential of the Kalkaroo project, and the option to acquire the project for A$205-million.
The company could elect not to exercise the option at any time during this period, provided that 5 000 m of exploration drilling had been done, or with the payment of a shortfall payment to Havilah.
In addition, the agreement provides a deferred contingent consideration of A$65-million, upon a 30% uplift in Kalkaroo’s measured and indicated resource estimate as well as a copper price-linked contingent payment in each year of production up to a maximum cumulative amount of A$135-million.
The Kalkaroo project, which is at prefeasibility stage, consists of a mineral resource estimate 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 said on Tuesday that the execution of the transaction documents satisfied one of the conditions precedent necessary for the proposed transaction.
Havilah will hold a general meeting allowing shareholders to vote on the proposed transaction, including the grant of the Kalkaroo option, and the disposal of the company’s interest in the project, on August 31.