Newmont Exploration has withdrawn from a joint-venture agreement geared at exploring tenements in the Mount Isa region, but Hammer Metals says it will continue exploring the prospects.
In a press release on Monday (June 4), Hammer said that Newmont “elected not to continue funding exploration of the targets” in the mineral-rich North Queensland region.
Under the agreement, Newmont had the right to earn a 75-percent interest by spending US$10.5 million, with Hammer managing exploration.
During the joint venture, the companies drilled two large IOCG targets at Overlander North and Dronfield, intercepting what Hammer reported as highly encouraging IOCG alteration and low-grade copper mineralization in both areas.
However, Newmont decided the targets did not qualify for further interest after two and a half years of exploration, leaving Hammer with the results of the work and a 100-percent unfettered interest.
The company intends to make the most of what it has, even with a mining giant bowing out.
Alex Hewlett, executive director of Hammer, said Newmont’s interest and subsequent retreat from the project “[allowed] Hammer to significantly advance [its] understanding of the JV targets – particularly the large mineralized system at Overlander.”
Hewlett said Hammer will continue the work, while seeking new partners.
“The negotiated conclusion of the joint venture will leave Hammer with unfettered rights to pursue several untested exploration opportunities in the former farm-in areas as well as continue with the exploration of our large portfolio of prospects at Mount Isa,” he said.
According to the company, the Overlander prospect has substantial untested potential for large mineralized bodies based on the drilling done so far.
“The two diamond drill holes drilled at Overlander North by the joint venture identified features consistent with an IOCG alteration system along with low grade copper values,” says the release.
“Hammer considers that a substantial part of the Overlander North geophysical and geochemical anomaly remains to be tested, particularly where the alteration and brecciation increases towards the Overlander shear,” it also states.
Copper results from the IOGC body at Overlander North include 97.3 meters at 0.54 percent copper from 359 meters in drill hole OVD001, including 21 meters at 1.7 percent copper from 435 meters.
Hammer also said it has decided to explore for cobalt on the property after a meteoric rise in cobalt metal prices from US$28,000 a tonne in late 2015 to US$89,000 in 2018. The company says previous drills have returned a very broad, low-grade intersection of cobalt, and this highlights the potential for a larger copper-cobalt resource at Overlander.
Hewlett said the company has plenty of work to get on with despite Newmont’s withdrawal.
“Infill and extensional drilling is set to recommence in early June at the Jubilee copper-gold deposit in joint venture with MIM Limited, a subsidiary of Glencore (LSE:GLEN), and results are expected shortly from the recently completed diamond drilling program on the Millennium cobalt-copper deposit.”
Global Energy Metals (TSXV:GEMC) has the right to earn a 75-percent interest in Millennium through direct project exploration and development spend, and recently signed a letter of intent to acquire two other cobalt projects from Hammer Metals.
On the Australian Securities Exchange on Monday, Hammer Metals was trading up 10.34 percent at AU$0.032, but the company has been trending downwards since the beginning of 2018, having lost 36 percent since January.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Global Energy Metals is a client of the Investing News Network. This article is not paid-for content.