Aeon Metals (ASX:AQR) has entered a Memorandum of Understanding with Armour Energy (ASX:AJQ) relating to gas supply from Armour’s exploration tenements in North West Queensland to Aeon Metals’ Walford Creek Project.
Aeon Metals’ Walford Creek Project site is located 10 kilometres North West from Armour’s ATP1087 which covers 7,138 square kilometres.
The MOU is to supply gas volumes of 1-2 Petajoules per annum.
Pricing will be determined to ensure an acceptable return on invested capital for both Armour and Aeon.
In the event that Armour farms out its interests in its tenement to third parties, gas supply to Aeon would only relate to Armour’s retained equity in the gas project.
Aeon has interests in a regionally extensive base metals tenement package in the Mount Isa and Constance Range areas of northwest Queensland.
The most advanced is Walford Creek, where work completed to date has defined a poly-metallic JORC compliant resource, with step out drilling continuing to expand the initial resource base.
The Walford Creek Project has a clear pathway to project development with the potential for an open pit mine development of world scale.
Metallurgical studies are underway to form part of the mining parameters that will support a feasibility study.
The company is also involved in an exploration and earn-in joint venture agreement over tenement EPM 17060 in Queensland with mining giant Rio Tinto (ASX:RIO).
Rio can earn an initial 70% interest in the tenement by spending a total of $2.7 million over four years.
