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Fortescue sinks teeth into copper-gold project

Fortescue copper

Fortescue will hunt for porphyry-hosted copper-gold in New South Wales after inking a farm-in with Magmatic Resources (MAG).

The farm-in will see Fortescue spend up to $14 million across six years to earn up to a 75 per cent interest in the Myall project.

The major miner can earn an initial 51 per cent interest in Myall by committing $6 million to exploration across four years, then earn a further 24 per cent by committing an additional $8 million over an additional two years.

Fortescue will also acquire a 19.9 per cent stake in Magmatic, becoming a cornerstone investor in the junior.

The placement will occur at a price of $0.04884 to raise $3.71 million for Magmatic. This price represents a 10 per cent premium to Magmatic’s 30-day volume-weighted average price as of January 31.

Magmatic Resources executive chair David Richardson believes Myall could be a significant project in the years to come.

“Myall has many of the signatures of a Tier 1 copper-gold deposit and Magmatic has recognised the need to partner with a major to further advance the project following the maiden resource,” he said.

“Fortescue’s cornerstone investment in MAG will allow the company to simultaneously advance our other two projects at Wellington North and Parkes which are strategically located near Alkane Resources’ Boda-Kaiser deposits and Tomingley gold operations, respectively.”

During the initial earn-in period, Magmatic will operate and conduct all exploration activities at Myall.

Magmatic said Myall holds similar geological characteristics to the Northparkes copper-gold mine located 50km to the south.

Evolution Mining recently acquired an 80 per cent stake in Northparkes, which has proven to be a reliable copper producer since coming online in 1993.

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