White Rock signs A$30M Earn-In and Joint Venture Option Agreement with Sandfire
ASX Announcement 25 March 2019
White Rock Minerals Limited (ASX:WRM) (White Rock) and Sandfire Resources NL (ASX:SFR) (Sandfire) have joined forces to fund the exploration and development for new high-grade zinc and precious metals volcanogenic massive sulphide (VMS) deposits at Red Mountain in central Alaska (Red Mountain Project). There are already two high grade deposits at the project with an Inferred Mineral Resource1 of 9.1 million tonnes @ 12.9% ZnEq2 for 1.1Mt of contained zinc equivalent.
Highlights
- White Rock has signed an Earn-In and Joint Venture Option Agreement to permit Sandfire to farm-in to its interests in the Red Mountain Project including high grade zinc-rich VMS mineralisation at the Dry Creek and West Tundra deposits and the newly discovered Hunter prospect.
- Sandfire can earn up to 51% of White Rock’s interest in its Red Mountain ZincSilver-Lead-Gold-Copper Project by spending A$20M on exploration over four years (Stage One).
- As a part of Stage One, a minimum of A$6M is required to be spent on the project in Year One (2019).
- Sandfire can then elect to increase its interest in the Red Mountain Project to 70% by sole-funding a further A$10M and by delivering a pre-feasibility study with an Ore Reserve within a further two years.
- White Rock can then elect to contribute its percentage share of expenditure to retain its 30% interest.
- The Red Mountain Project includes a 475km² tenement package covering numerous historic VMS prospects with little modern exploration, providing Sandfire and White Rock with a large strategic footprint over a potential new VMS district3 .
MD & CEO Matt Gill said “White Rock welcomes Sandfire as a joint venture partner that shares White Rock's vision for the exploration and development of our exciting Red Mountain Project.
Securing a high-quality partner with world leading expertise in the exploration and development of base metals projects is a strong endorsement to the quality and potential of our globally significant high-grade zinc VMS Red Mountain Project.
It is significant for White Rock shareholders that the terms of the Agreement with Sandfire provide a funding pathway to advance the Red Mountain Project through exploration to the point of advanced development studies and allow White Rock to retain a 30% interest in any project development at the point when the economics of a project are well defined by a Pre-Feasibility Study.
The prospectivity of the Red Mountain Project was well illustrated by last year’s field season activities that included drill hole results returning in excess of 17% zinc, 6% lead, 1,000 g/t silver, 6 g/t gold and 1.5% copper and the discovery of new massive sulphide mineralisation at the Hunter prospect4, 5, 6. The 2019 field season promises more exciting results with plans for a modern airborne EM survey, ahead of a 24-man field camp being established with surface crews completing mapping, geochem sampling, CSAMT geophysics and drilling.
We look forward to working with our strategic partner Sandfire and progressing this highly prospective project with the commencement of this program and the subsequent news flow that will result.”
Earn-In and Joint Venture Option Agreement
White Rock has entered into an Earn-In and Joint Venture Option Agreement (Agreement) with Sandfire. This Agreement relates to the parties' previously announced proposed joint venture (Joint Venture) 7 for the exploration and development of the Red Mountain Project.
Sandfire's Joint Venture funding obligations under the Agreement are structured across four stages as previously announced and include an option to spend a minimum of A$20M over four years to earn 51%, with a minimum contribution of A$6M in 2019. The key terms of the Joint Venture are set out below.
Joint Venture Structure
The Joint Venture will be incorporated and operated through a USA organised limited liability company (“LLC”). A wholly owned subsidiary of Sandfire will initially hold a 15% membership interest in the LLC in exchange for the commitment to provide the Minimum Contribution (approximately A$6M - see below) and a wholly owned subsidiary of White Rock will hold the remaining 85% membership interest, in exchange for procuring that the Red Mountain Project assets are transferred into the LLC. The Manager of the LLC will be appointed by White Rock during the first year of the Option period and thereafter by Sandfire. The Manager is entitled to a Management Fee.
Quarterly Activities Report - for the Quarter ended 31 December 2018
ASX Announcement 30 January 2019
Red Mountain high-grade zinc and precious metals project
Red Mountain is a 100% owned globally significant1 zinc-rich volcanogenic massive sulphide (“VMS”) project located in central Alaska, USA, with two already identified deposits (Dry Creek and West Tundra Flats) providing White Rock with a Maiden Resource2 base of 16.7Mt at 8.9% ZnEq3 including a highgrade component of 9.1Mt @ 12.9% ZnEq3 , and newly discovered massive sulphide mineralisation at the Hunter prospect4.
During the Quarter, several significant events impacted positively on the future exploration potential for the Red Mountain Project. These included:
- Sandfire Resources NL (ASX:SFR) exercised its option to enter into a Joint Venture Agreement5 over the Red Mountain Project, which once signed, would see funds committed with Stage One of this JV being a minimum of A$20M spent on the project over the first four years. For Year One (the 2019 field season), the funding requirement would be a minimum of A$6M. This is a great endorsement of White Rock’s view of the project’s quality and potential.
- Expansion of the tenement package6 with an area of 475km² now secured over the Bonnifield Mining District and additional prospective footwall stratigraphy, plus a number of additional historic VMS mineral occurrences not yet explored with modern techniques.
- Identification of 9 high priority geochemical anomalies7 from a detailed regional stream sediment program across the core area of prospectivity centred on the Bonnifield East syncline with particular emphasis on two distinct anomaly clusters; west of the known mineralisation at Dry Creek (the southern limb of the Bonnifield syncline) and in the Glacier Creek area with strong sulphide footwall alteration on the northern limb of the Bonnifield syncline. Strong base metal anomalism up to 1.1% zinc in streams indicates high prospectivity for outcropping massive sulphides.
Mt Carrington gold and silver project
Mt Carrington is a 100% owned advanced gold-silver epithermal project located in northern NSW, Australia, with a 2017 Pre-Feasibility Study (PFS) into the “Gold First” development stage declaring a Maiden Ore Reserve of 3.47 million tonnes at 1.4g/t gold for 159,000 ounces gold8 within a resource of 241,000 ounces of gold and 23 million ounces of silver9.
During the Quarter the Company continued to explore avenues to advance the Mt Carrington Project with interested parties.
Corporate
During the Quarter Mr Peter Lester was appointed Non-Executive Chairman following the resignation of Mr Brian Phillips. Mr Stephen Gorenstein was also appointed to the Board as a Non-Executive Director.
Red Mountain Zinc-Silver-Lead-Gold VMS Project
Sandfire Resources NL (“Sandfire”) to Earn-In
During the Quarter, Sandfire exercised its option under the subscription agreement announced to ASX on 10 July 2018 (Subscription Agreement) to enter into a Joint Venture Agreement with White Rock (Joint Venture) regarding White Rock's Red Mountain Project in central Alaska.
White Rock commenced a strategic relationship with Sandfire in July 2018 in relation to its Red Mountain Project. In addition to the $2.5 million equity contribution under the Subscription Agreement, Sandfire has also previously provided an unsecured $1 million convertible loan to White Rock (refer to White Rock's ASX announcement dated 22 August 2018).
The Joint Venture will enable White Rock to benefit from Sandfire’s significant technical expertise to develop the Red Mountain Project as well as further strategic support as the Company moves to unlock the potential from its large strategic land holding.
Under the terms of the Subscription Agreement, the parties must use their best endeavours to negotiate the terms of the Joint Venture within 3 months of exercising its option, using an AMPLA (Australian Mining and Petroleum Law Association) model document and the following as the guiding principles for the content of the Joint Venture:
Stage 1: Sandfire to fund a total of A$20 million over four years to earn 51%, with a minimum expenditure by Sandfire of A$6 million in Year One.
Stage 2: Sandfire to fund a further A$10 million and deliver a pre-feasibility study (PFS) over an additional two years to earn 70%, which may be extended by Sandfire for a further year in certain circumstances.
Stage 3: White Rock may elect to contribute to the Joint Venture. If White Rock elects not to contribute, Sandfire can sole fund Stage 3 to earn 80% by completion of a definitive feasibility study.
Stage 4: White Rock may elect to contribute to the Joint Venture. If White Rock elects not to contribute, Sandfire will earn 90% and White Rock's 10% interest will be earned from project cash flow.
Project Management: White Rock is entitled to continue managing the project for at least the first year of the earn-in and to be paid a management fee equal to 10% above all project expenses, with 50% of the fee to be paid on signing of the Joint Venture and the balance to be paid in 3 equal instalments (each instalment representing 16.67% of the management fee) on a quarterly basis thereafter. Ongoing management responsibility of the project will be subject to annual review and after the first year will be at Sandfire's election.
The parties have commenced negotiation of the Joint Venture Agreement.
White Rock has also received confirmation from ASX that the entry into the Joint Venture does not require shareholder approval for the purposes of Listing Rule 10.1.
Sandfire is a leading mid-tier Australian mining company focused on discovering, developing and operating high quality resource assets capable of delivering substantial returns for its shareholders. Sandfire is a leading Australian copper producer which operates the high-grade DeGrussa Copper-Gold Mine, 900 km north of Perth in Western Australia. Sandfire has a growing portfolio of exploration interests and joint ventures in highly prospective mineral provinces around Australia and overseas.
White Rock Minerals to build on its 2018 Red Mountain VMS Project gains
ASX Announcement 16 January 2019
White Rock Minerals Ltd (“White Rock” or the “Company”) is pleased to provide an update regarding White Rock's globally significant high-grade zinc and precious metals volcanogenic massive sulphide (“VMS”) Red Mountain Project in central Alaska (Red Mountain Project).
The successful progress of the 2018 exploration program resulted in the signing of a cornerstone investment and strategic relationship agreement with Sandfire Resources NL (ASX:SFR) (Sandfire). Sandfire contributed $2.5 million equity and a further $1 million convertible loan unsecured to White Rock during 2018.
Subsequently, at the end of 2018, Sandfire exercised its option to enter into a Joint Venture Agreement1 over the Red Mountain Project, which once signed, would see funds committed with Stage One of this JV being a minimum of A$20M spent on the project over the first four years. For Year One (the 2019 field season), the funding requirement would be a minimum of A$6M. This is a great endorsement of White Rock’s view of the project’s quality and potential.
The results achieved from the successful 2018 exploration program also resulted in the expansion of the tenement package2 with an area of 475km² now secured over the Bonnifield Mining District and additional prospective footwall stratigraphy, plus a number of additional historic VMS mineral occurrences not yet explored with modern techniques.
MD & CEO Matt Gill said “White Rock has successfully completed a number of exploration activities during 2018 as we push towards proving up that the Bonnifield Mining District can indeed be an emerging new VMS camp of significance, containing zinc, silver, lead and gold. Our success in making a new discovery at the Hunter prospect, high grade drilling intercepts at Dry Creek and West Tundra, confirming that these two deposits remain open down dip and in places along strike, and demonstrating the successful application of geophysics and geochem approaches, are significant developments. This work continues to unlock a much larger picture in terms of resource and district potential.”
“During 2019, White Rock plans to follow up on the successful 2018 exploration program. We are in the process of designing and budgeting a program of field mapping, rock and soil sampling, geophysics and diamond drilling at Red Mountain. This work is designed to advance and delineate exploration targets towards the discovery of new mineralization that has the potential to favourably impact project economics and add to our already globally significant high-grade JORC Resource.”
Summary
Exploration program highlights since White Rock acquired the Red Mountain Project include:
- Maiden JORC 2012 Mineral Resource estimate3 for the Dry Creek and West Tundra Flats deposits calculated from historic drilling with:
- High grade Inferred Mineral Resource of 9.1 million tonnes @ 12.9% ZnEq4 for 1.2Mt of contained zinc equivalent at a 3% Zn cut-off.
- Total Inferred Mineral Resource of 16.7 million tonnes @ 8.9% ZnEq4 for 1.5Mt of contained zinc equivalent at a 1% Zn cut-off for Dry Creek, 3% Zn cut-off for West Tundra Flats & 0.5% Cu cut-off for Dry Creek Cu Zone.
- Impressive base metal and precious metal content with 678,000t zinc, 286,000t lead, 53.5 million ounces silver and 352,000 ounces gold.
Further Highlights for 2018
- A total of 24 drill holes for 4,111 metres of diamond core drilling was completed during 2018.
- Best drill intersection in the history of this project into the Discovery Lens at the Dry Creek deposit with 4.7m @ 19.5% Zn, 7.8% Pb, 466g/t Ag, 6.9g/t Au and 1.5% Cu for 49.7% ZnEq4 (DC18-79)5 .
- Down dip extension of the Fosters Lens at the Dry Creek deposit with 4.3m @ 4.8% Zn, 2.3% Pb, 1,435g/t Ag, 2.2g/t Au and 0.5% Cu for 43.2% ZnEq4 (DC18-77)5 and remaining open down dip.
- Best drill intersection in the history of this project at the West Tundra deposit with 3.5m @ 15.1% Zn, 6.7% Pb, 518g/t Ag, 2.1g/t Au and 0.2% Cu for 35.2% ZnEq4 (WT18-28)6 .
- Discovery and successful drill testing of the new Hunter prospect massive sulphide mineralisation with 1.4m @ 17.4% Zn, 3.9% Pb, 90g/t Ag & 1.6% Cu for 25.8% ZnEq4 from 48.2m (HR18-01)7 . This discovery remains open east and west and down dip with massive sulphide mapped for over 500 metres along strike on the surface.
- Identification of 9 high priority geochemical anomalies8 from a detailed regional stream sediment program across the core area of regional prospectivity centred on the Bonnifield East syncline with particular emphasis on two distinct anomaly clusters; west of the known mineralisation at Dry Creek (the southern limb of the Bonnifield syncline) and in the Glacier Creek area with strong sulphide footwall alteration on the northern limb of the Bonnifield syncline. Strong base metal anomalism up to 1.1% zinc in streams indicates high prospectivity for outcropping massive sulphides.
- Successful orientation ground geophysics across known mineralisation with CSAMT accurately identifying massive sulphide mineralisation at Dry Creek and West Tundra enabling the technique to be a rapid reconnaissance tool for identifying drill targets within zones of anomalous geochemistry and favourable stratigraphy9 . The CSAMT crew acquired 40 line km of new data along strike of Dry Creek and West Tundra.
- Successful application of portable XRF analysis of soil samples to deliver rapid target generation.
Sandfire Exercises Option to Enter Joint Venture on Red Mountain
ASX Announcement 27 December 2018
White Rock Minerals Limited (ASX:WRM) (White Rock) is pleased to announce that Sandfire Resources NL (ASX:SFR) (Sandfire) has exercised its option under the subscription agreement announced to ASX on 10 July 2018 (Subscription Agreement) to enter into a Joint Venture Agreement with White Rock (Joint Venture) regarding White Rock's globally significant high-grade zinc and precious metals VMS Red Mountain Project in central Alaska (Red Mountain Project).
White Rock commenced a strategic relationship with Sandfire in July 2018 in relation to White Rock's Red Mountain Project. In addition to the $2.5 million equity contribution under the Subscription Agreement, Sandfire has also previously provided an unsecured $1 million convertible loan to White Rock (refer to White Rock's ASX announcement dated 22 August 2018).
The Joint Venture will enable White Rock to benefit from Sandfire’s significant technical expertise to develop the Red Mountain Project as well as further strategic support as the Company moves to unlock the potential from its large strategic land holding.
MD & CEO Matt Gill said “White Rock welcomes Sandfire as a Joint Venture partner that shares White Rock's vision for the exploration and development of the Red Mountain Project. Securing a high-quality partner with world leading expertise in the exploration and development of base metals projects is a strong endorsement to the quality and potential of White Rock’s globally significant highgrade zinc VMS Red Mountain Project. White Rock looks forward to collaborating with Sandfire Resources as part of our strategic relationship and this JV agreement.”
Under the terms of the Subscription Agreement, the parties must use their best endeavours to negotiate the terms of the Joint Venture within 3 months using an AMPLA (Australian Mining and Petroleum Law Association) model document and the following as the guiding principles for the content of the Joint Venture:
- Stage 1: Sandfire to fund a total of A$20 million over four years to earn 51%, with a minimum expenditure by Sandfire of A$6 million in Year One.
- Stage 2: Sandfire to fund a further A$10 million and deliver a pre-feasibility study (PFS) over an additional two years to earn 70%, which may be extended by Sandfire for a further year in certain circumstances.
- Stage 3: White Rock may elect to contribute to the Joint Venture. If White Rock elects not to contribute, Sandfire can sole fund Stage 3 to earn 80% by completion of a definitive feasibility study.
- Stage 4: White Rock may elect to contribute to the Joint Venture. If White Rock elects not to contribute, Sandfire will earn 90% and White Rock's 10% interest will be earned from project cash flow.
- Project Management: White Rock is entitled to continue managing the project for at least the first year of the earn-in and to be paid a management fee equal to 10% above all project expenses, with 50% of the fee to be paid on signing of the Joint Venture and the balance to be paid in 3 equal instalments (each instalment representing 16.67% of the management fee) on a quarterly basis thereafter. Ongoing management responsibility of the project will be subject to annual review and after the first year will be at Sandfire's election.
The parties have commenced negotiation of the Joint Venture Agreement.
White Rock has also received confirmation from ASX that the entry into the Joint Venture does not require shareholder approval for the purposes of Listing Rule 10.1
About Sandfire Resources NL:- Sandfire is a leading mid-tier Australian mining company focused on discovering, developing and operating high quality resource assets capable of delivering substantial returns for its shareholders. Sandfire is a leading Australian copper producer which operates the high-grade DeGrussa Copper-Gold Mine, 900 km north of Perth in Western Australia. Sandfire has a growing portfolio of exploration interests and joint ventures in highly prospective mineral provinces around Australia and overseas.
