Fox Resources (ASX: FXR) has inked a definitive Farm-In and Joint Venture Agreement with Pilbara Minerals (ASX: PLS), allowing Fox to earn up to an 80% interest in 10 of Pilbara Minerals' tenements in Western Australia.
This deal will increase Fox's Pilbara tenement holdings by 87% to 2,140 square kilometres, with the tenements in close proximity to site infrastructure at the company's Radio Hill Mine.
Bruce Garlick, chief executive officer of Fox Resources, commented: "The Fox-PLS joint venture provides the foundation to firm up a number of anomalies previously identified on the PLS tenements, and also identify new anomalies which will provide new additional drill targets.
"A significant VTEM program is being prepared which will cover new areas of the PLS tenements that have not been subject to VTEM previously.
"This represents a great opportunity for Fox and PLS to develop these assets, which are close to Fox's other projects and current landholding in the Pilbara."
The two companies are now working with Newexco to finalise an initial exploration program to carry out exploration activities within the tenements, which are considered to be prospective for base metals, platinum group elements and/or gold mineralisation.
Terms of the deal
Under the agreement, Fox Resources can acquire up to an 80% interest in the tenements, in return for carrying out extensive exploration activity.
Fox is required to make an upfront cash payment of $150,000 to Pilbara Minerals to earn an initial 40% interest in the tenements.
The remaining 40% will be earned by Fox in three stages over a period of three years, with Fox required to meet an annual spend of $565,000 in each of the first two years (each to earn an additional 15% interest) and $839,000 in the third (to earn the final 10% interest).
Fox can, however, elect to withdraw from the joint venture after spending a minimum of $565,000 in the first year of the joint venture at no additional cost.
The company will serve as the manager of the joint venture.
Fox plans to prioritise its focus on the recently acquired Pilbara Minerals tenements - which are considered highly prospective for base metals, platinum group metals and gold.
VTEM has provided some exciting anomalies which Fox is focusing on.
Fox holds tenure over a significant strike length of the Whundo sequence along strike to the northeast.
Exploration drilling is planned for the Ayshia, Austin - which lies beneath Whundo, Conquest and Sunchaser prospects.
Importantly, there is the possibility of resource extensions in the Whundo area.
Fox is aiming to develop the VMS camp into a pipeline of mineable projects.
The company is focusing on generating a pipeline of targets to consolidate the defined resources at Radio Hill and Sholl.
Its primary focus is to delineate resources to extend the life of the bacterial heap leach project.
There is a large tenement holding surrounding Radio Hill and large tonnage, low grade nickel-copper deposits amenable to bacterial heap leaching.
There is the potential for increases in low grade resources that may have been overlooked in the past.
Locking in the farm-in and joint venture partnership with Pilbara Minerals provides Fox with the potential for additional drill targets in close proximity to its Radio Hill Mine, which in turn means potential synergies for development - including access to already existing site infrastructure.
The Fox-Pilbara Minerals joint venture provides the foundation to firm up a number of anomalies previously identified on the Pilbara Minerals tenements, and also identify new anomalies which will provide new additional drill targets.
The 87% increase in tenement holdings from 1,142 square kilometres to 2,140 square kilometres near the Radio Hill Mine is significant and should provide Fox with a number of new drill targets close to Radio Hill Mine infrastructure, 35 kilometres from Karratha.
This is a substantial value add to Fox's current tenement portfolio and should boost Fox's market cap. as it defines targets and develops the assets.
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