Chinalco Yunnan Copper Resources Limited announced that it has signed a binding agreement with Xstrata Mount Isa Mines Limited to commence exploration activities on the Mount Frosty project covering the Mary Kathleen shear zone in far North West Queensland.
The Mount Frosty project is located about 60 kilometers east of Mount Isa in far North West Queensland, Australia and is contiguous with CYU’s 100% owned Mt Isa project and with EPM 14022 part of the Mary Kathleen JV project in which CYU hold 70% and Goldsearch Limited 30%.
Recent drilling undertaken by Xstrata Copper on Mount Frosty returned best intersections of 13 meters 0.64% Cu from 109 meters in KOPD001 and 20 meters 1.2% TREO from 144 meters in KOPD005. Xstrata Copper concluded that copper mineralization is associated with pyrrhotite as seen at Elaine, which was detected with VTEM and confirmed in the drilling.
Under the terms of the JV, CYU will farm in to the Mount Frosty project and can earn up to 75% interest by spending USD 4.5 million in the next 6 years in a two stage earn in. In the first stage, CYU can earn up to 51% of the project by spending USD 1.5 million within three years including 1,500 meters of drilling per annum.
If CYU elects to continue to stage 2 it can earn an additional 24% by spending a further USD 3 million within three years. CYU’s minimum commitment to the project is the first year’s expenditure commitment of USD 250,000 and a minimum of 1,500 meters of drilling. Any drilling depths and expenditure that exceed the required minimum within a certain period can be attributed towards the following period.
Xstrata Copper retains a right to buy back 26% of the project by paying 3x the expenditure contributed by CYU in the stage 2 periods.
Mr Jason Beckton MD of CYU said that “We are excited in expanding our relations with Xstrata Copper with agreements now signed in Chile and Australia. This agreement with the contiguous Xstrata Copper property allows CYU to further target blind copper deposits associated with the Mary Kathleen shear zone. CYU and GSE has had success in defining a new copper sulphide zone at the Elaine prospect situated approximately 6 kilometers south of the historic Mary Kathleen Uranium Deposit along this regional shear zone. We will be using our refined exploration model for the Elaine prospect to build a pipeline of copper targets to be drilled in the current and next calendar years.”
