Augur Resources: Farm-In Terms Secured For Yeoval Project

May 24, 2012 2:08 AM ET
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Augur Resources (ASX: AUK) is set to realise the value of the company's non-core Yeoval Project in New South Wales, with a Farm-in by partner Zodiac to progress.

The Yeoval Project covers 147 square kilometres, and is prospective for porphyry copper-gold and molybdenum mineralisation, epithermal gold and silver mineralisation and magnetite rich copper-gold mineralisation.

It includes the Yeoval Porphyry deposit, which hosts an Inferred JORC Resource of 12.9 million tonnes at 0.38% copper, 0.14% gold, 120.1 parts per million molybdenum and 2.2 grams per tonne silver.

The resource remains open at depth, to the east and to the south.

Under the modified terms of the Farm-in agreement for Yeoval, Zodiac will pay $245,000 cash to Augur and transfer 1.25 million shares in Goodrich Resources (ASX: GRX), at a price of $0.20 per share.

In addition, Zodiac can pay $2 million to take up Augur's remaining 25% share in the Yeoval Project during the Farm-in period.

Augur will be free carried on the project for a further two years. Following the Farm-in period, the company can choose to contribute 25% to expenditure on the project, or progress to a free-carried net smelter royalty of 2.5%, limited to $2 million.

The Farm-in agreement with Zodiac will allow Augur to focus its attention on its more advanced projects, which form the core of the company's strategy.

These include the company's flagship Wonogiri project in Indonesia, which recently returned favourable metallurgical results from simple flotation testing.

Mineralisation from the Randu Kuning porphyry deposit returned high recoveries of up to 89% gold and 93.4% copper.

Augur has a 51% stake in the project and is working to earn 80% of the project by spending $2 million on exploration and development by early December 2012.

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