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GBM Resources’ Farm In Partners Outline A$3.8m Exploration Budget For Mt Isa Projects

GBM Resources' (ASX: GBZ) farm-in partners, Pan Pacific and Mitsui, have demonstrated their commitment to advancing four projects located in the highly prospective Mt Isa region of northwest Queensland, outlining a A$3.8 million exploration budget to March 2013.

The projects cover 1,580 kilometres of prospective multi‐minerals ground in the eastern succession of the Mount Isa inlier.

The increased exploration budget for 2012 will support geophysical surveys and extensive drilling of over 10,000 metres on a range of targets over the Bungalien, Grassy/Talawanta, Mount Margaret, and Chumvale projects.

Exploration in 2011 uncovered buried iron oxide copper gold (IOCG) mineralisation at Bronzewing Bore, one of a number of targets identified in the Bungalien project area.

GBM intersected a broad interval of anomalous copper mineralisation from the first drill hole completed on the Bungalien project farm in area, confirming a new IOCG system.

The hole returned mineralisation over 200 metres averaging almost 0.1% copper, and including 24 metres averaging 0.28% copper, and may represent a halo style intersection.

Meanwhile, the Mt Margaret West tenement group includes a number of targets in close proximity to Xstrata's (LSE: XTA) 200 million tonne at 1% copper and 0.5 grams per tonne gold Ernest Henry mine.

Farm-in terms

Under the agreement Pan Pacific and Mitsui, through their co-established Australian subsidiary Cloncurry Exploration and Development, can earn up to 51% by spending $15 million within six years.

The partners can then increase their collective interest in the projects to 90% by spending a further $40 million.

Once they have achieved their 90% interest, GBM will then be free carried through to the completion of a Bankable Feasibility Study with a 10% interest.

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