Cassini Resources signs $36M JV with OZ Minerals
THE BOURSE WHISPERER: There was much hearty handshaking happening at the booth of Cassini Resources (ASX: CZI) on the first morning of the Diggers & Dealers conference in Kalgoorlie following the announcement the company has signed a Binding Heads of Agreement with OZ Minerals (ASX: OZL).
Under the agreement OZ Minerals can earn up to a 70 per cent interest in Cassini’s 100 per cent-owned West Musgrave project (WMP) by sole funding a minimum of $36 million on development and exploration, including completion of a Definitive Feasibility Study (DFS).
The agreement includes funding for continued studies on Nebo-Babel to progress it to a “Decision to Mine”, as well as a regional exploration spend of up to $8 million to assist in identifying additional value adding opportunities.
“As well as funding exploration and development of the WMP, the partnership provides access to the significant technical capabilities of OZ Minerals, a company with significant base metal project development expertise”, Cassini Resources managing director Richard Bevan said in the company’s announcement to the Australian Securities Exchange.
“We see this as a great deal for the company and our shareholders as it provides for a significant level of funding to progress the project which will give us a clear line of sight on a decision to mine and subsequently, potential cash flow for the company.
“It is a clear endorsement of the potential of the project.”
Commenting on the deal, OZ Minerals managing director Andrew Cole described the deal as strategic, adding that it is more about the company earning into a very sizeable proportion of a new mining province rather than just a single project.
“The West Musgrave project is Australia’s largest undeveloped copper nickel deposit,” Cole continued.
“With over 200 million tonnes of resource at 1.28 per cent copper equivalent that could be mined with a shallow open pit, Nebo Babel is pretty compelling just on its own.”
OZ Minerals’ initial commitment to the deal requires it to sole fund an initial minimum spend of $3 million within a maximum 12 month period to further progress scoping studies on the WMP as well as providing for the services of two full-time technical employees to work under the instruction of Cassini while this is met.
Cassini and OZ Minerals expect the first works under the agreement to commence during the fourth quarter of 2016, which is to include drilling, metallurgical testwork and engineering studies to support further study work.
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