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Monax Mining signs option deal to acquire prospective Queensland bauxite tenements

Junior explorer Monax Mining (ASX:MOX) has penned an Option Deal with Delminco for five EPM Applications within the highly prospective Cape York Peninsula in Queensland.

Under the terms of the agreement, Monax will pay a $50,000 Option Fee which provides Monax the rights to explore the tenements for a period of one year.

At the completion of the twelve month option period if Monax wishes to purchase the tenement outright it will make a final payment of $500,000 to Delminco.

Bauxite is a naturally occurring material from which alumina (Al2O3) and aluminium metal are produced.

Australia is a major supplier of bauxite accounting for approximately 33% of global production in 2007.

Monax Managing Director Gary Ferris said the company believed the project offers the Company significant exposure to a commodity which is considered to have excellent growth capacity with demand for bauxite estimated to increase significantly as supply and quality decreases from other sources including Indonesia.

The Cape York Peninsula is considered to represent the premier bauxite province in the world, with two major mining operations at Weipa and Aurukun. Cape Alumina’s Pisolite Hills deposit also located on the Cape York Peninsula is due to commence production in 2013-2014.

Included within the Option Deal are five current tenement applications, which cover an area of approximately 1358 km2. All five tenements are currently being advertised, which is the first stage of the granting process.

Monax has also submitted three EPM Applications covering an area of approximately 644 km2, taking the total project area to approximately 2002 km2.

Monax is planning a rapid exploration program when tenements are granted comprising hand auger sampling across all areas to assess the depth of the bauxite or weathering profile.

Disclosure: The author holds no positions in the company