Koongie Park Base Metals
Anglo Australian Resources – 100% interest
Anglo Australian holds a portfolio of tenements approximately 20km to the south west of Halls Creek in the Eastern Kimberley region of Western Australia.
Anglo Australian’s tenements at Koongie Park encompass more than 40kms of the Koongie Park Formation, which is prospective for VMS-style base metal deposits.
A map illustrating the company’s tenement position is set out below.
Some 245 RC and diamond drill holes encompassing 50,0417m have been drilled on the project by Anglo Australian. This effort focused on resource, metallurgical and geotech drilling at two of the prospects, Sandiego and Onedin, with mineralisation seeming to have accumulated in fold hinges.
The Company has entered into a binding term sheet with AuKing with respect to the Koongie Park Project. Under the Agreement, AuKing and Anglo Australian propose to form a joint venture (Joint Venture) on terms which include, but are not limited to, the following:
- Anglo Australian retains the right to explore for and develop precious metals deposits within the project area; and
- AuKing is granted the right to:
- Explore for and develop base metals deposits within the project area;
- Conduct exploration and development activities for base metals deposits on the project area during the earn-in period; and
- Earn up to a 75% interest in the project area through the joint venture by funding exploration and project development studies (as stipulated below).
AuKing Earn-in Rights
The Agreement provides for a two-staged earn-in process whereby AuKing can ultimately secure a 75% project interest in the Koongie Park Project. A summary of the two-stage earn-in is outlined below.
First Earn-in Period
AuKing shall be deemed to have earned a nominal 25% interest in the Joint Venture (to be formed upon satisfaction of the first earn-in milestone) upon AuKing making a total initial payment of $1,000,000 to Anglo Australian, in the following tranches:
- $100,000 as a non-refundable deposit within 5 business days of the parties signing the Agreement; and
- $900,000 immediately after satisfaction of the Conditions Precedent.
During the First Earn-In Period of twenty four (24) months after the satisfaction of the Conditions Precedent, AuKing may earn a further 25% interest in the Joint Venture by incurring expenditure of $1.5 million including expenditure on exploration, testwork and related analysis to establish a commercially viable processing solution for the Koongie Park oxide ores (First Earn-In Milestone).
Upon satisfying the First Earn-in Milestone, AuKing shall be deemed to have earned an additional 25% interest in the Joint Venture for a total 50% interest in the Joint Venture. The Joint Venture is to be formed upon satisfaction of the First Earn-in Milestone. AuKing then has a 10 business day period to elect to proceed with the Second Earn-In Period.
If AuKing fails to satisfy the First Earn-in Milestone during the First Earn-in Period, AuKing will be deemed to have withdrawn from the Joint Venture, will cease to have any interest in the Joint Venture and the Agreement automatically terminates.
Second Earn-in Period
During the Second Earn-in Period, which is the 12 month period commencing from AuKing’s election to proceed with the Second Earn-in after completion of the First Earn-In Period, AuKing may earn a further 25% interest in the Joint Venture by incurring additional expenditure of $1,500,000, including expenditure on exploration activities and feasibility studies with a view to establishing mining operations on the Onedin and Sandiego deposits on the Tenements (Second Earn-In Milestone).
Upon satisfying the Second Earn-in Milestone, AuKing shall be deemed to have earned an additional 25% interest in the Joint Venture for a total 75% interest in the Joint Venture. If AuKing fails to satisfy the Second Earn-In Milestone during the Second Earn-in Period, then AuKing will retain its earned interest in the Joint Venture of 50%. “