Farm-in to Rio Tinto Exploration’s highly prospective Paterson South tenure
Exploration farm-in and joint venture arrangement entered into with Rio Tinto Exploration
Greatland secures access to highly prospective tenure
Enhanced alignment between the discoverers of the world-class Havieron and Winu deposits
Greatland Gold plc (AIM: GGP) is pleased to announce that the Company has entered into a farm-in and joint venture arrangement with global mining group Rio Tinto (ASX/LSE:RIO), to accelerate exploration across 1,884km² of highly prospective tenure within the Paterson Province of Western Australia (Paterson South Project) located near the Company’s world-class Havieron gold-copper project1 (Havieron).
The Paterson South Project farm-in and joint venture arrangement is consistent with Greatland’s Australian asset growth strategy including the Company’s commitment to exploration success.
The tenements are an outstanding package, which host several underexplored anomalies which the Company considers to be the closest to a Havieron lookalike within the Paterson Province.
In addition, there has been historical delineation of gold in rock chips and copper intersected with strong correlation to a Telfer style deposit.
The expansion of Greatland’s footprint and exploration activities in the Paterson Province leverages Greatland’s existing presence in the region, its good standing within the Paterson community and the strong technical knowledge fostered through the discovery of Havieron.
The Paterson South Project remains relatively underexplored and is a logical fit for Greatland’s existing adjacent tenure holdings.
[1] Held by the Havieron JV between Greatland (30%) and Newcrest Mining Limited (Newcrest) (70%).
Highlights
§ The eastern group of the Paterson South Project tenements host several underexplored magnetic anomalies. These targets are within Proterozoic sediments and are considered by the Company to be the closest to a Havieron lookalike within the Paterson Province
§ The western group of the Paterson South Project tenements have a geological setting which is a strong correlation to the Telfer deposit with historical delineation of gold in rock chips and copper intersected in the limited drilling undertaken to date
§ Greatland to commence drilling in 2023
§ Initial minimum commitment of A$1.1 million of expenditure and 2,000 metres of drilling before 31 December 2024
§ Farm-In: Greatland is entitled to earn up to a 75% joint venture interest in the Project Tenements under a two-stage farm-in arrangement:
– Stage 1 Farm-In: Greatland is entitled to earn a 51% joint venture interest in the Paterson South Project by incurring at least A$7.1 million of exploration expenditure and completing 7,500 metres of drilling within four years; and
– Stage 2 Farm-In: Greatland is entitled to earn an additional 24% joint venture interest in the Paterson South Project (cumulative joint venture interest of 75%) by spending at least an additional A$14 million of exploration expenditure and completing a further 17,000 metres of drilling within three years of completing the Stage 1 Farm-In.
Greatland Managing Director, Shaun Day, commented:
“The Paterson South Project tenement package is an outstanding opportunity with a number of high priority, highly prospective and heritage cleared drill targets. We expect that some of these targets can be incorporated in our 2023 drilling campaign.
These targets include underexplored anomalies which the Company considers to be the closest to a Havieron lookalike within the Paterson Province.
Other opportunities include historical delineation of gold in rock chips and copper intersected with strong correlation to a Telfer style deposit.
This tenure complements the Company’s current ground position to provide a 105km contiguous holding. The addition of the Paterson South Project more than doubles our current footprint with the most prospective targets within 50km of Telfer.
Our farm-in and joint venture with Rio Tinto is consistent with our strategy of continuing to invest in exploration success, and aligns the companies responsible for the discovery of Havieron and Winu, the two biggest and most significant orebodies found within the Paterson Province since Telfer in the 1970s.”
Paterson South Project farm-in and joint venture arrangement
Greatland Paterson South Pty Ltd, a wholly-owned subsidiary of the Company, has executed a long form farm-in and joint venture term sheet with Rio Tinto Exploration Pty Limited (RTX), a wholly-owned subsidiary of Rio Tinto in respect of the Paterson South Project which comprises exploration licences E45/4807, E45/4815, E45/4834, E45/5122, E45/5238, E45/5242, E45/5532, E45/5351 and E45/5576 (Project Tenements). The Paterson South Project is currently 100% beneficially held by RTX.
Under the farm-in and joint venture arrangement:
§ Up-front Payment: Greatland will make an up-front payment of A$350,000 to RTX payable in either cash or Greatland shares at Greatland’s election to be paid within 30 days of execution if Greatland elects to pay in cash or within 6 months if Greatland elects to pay in shares
§ Farm-In: Greatland is entitled to earn up to a 75% joint venture interest in the Project Tenements under a two-stage farm-in arrangement:
§ Stage 1 Farm-In: Greatland is entitled to earn a 51% joint venture interest in the Paterson South Project by incurring at least A$7.1 million of exploration expenditure and completing 7,500 metres of drilling within four years; and
§ Stage 2 Farm-In: Greatland is entitled to earn an additional 24% joint venture interest in the Paterson South Project (cumulative joint venture interest of 75%) by spending at least an additional A$14 million of exploration expenditure and completing a further 17,000 metres of drilling within three years of completing the Stage 1 Farm-In.
As part of the Stage 1 Farm-In, Greatland’s minimum commitment comprises A$1.1 million of exploration expenditure and 2,000 metres of drilling to be completed before 31 December 2024. Greatland is entitled to withdraw once it has met this minimum commitment.
If Greatland completes the Stage 1 Farm-In and elects to acquire a 51% joint venture interest in the Paterson South Project, an unincorporated joint venture (PSJV) will be formed between Greatland Paterson South Pty Ltd (51%) and RTX (49%). Greatland Paterson South Pty Ltd will be the manager of the PSJV. RTX is entitled, after completion of the Stage 1 Farm-In, to elect to contribute to its share of PSJV expenditure. If RTX so elects, Greatland Paterson South Pty Ltd’s PSJV joint venture interest will remain at 51% and the Stage 2 Farm-In will not apply.
Outside of the farm-in periods, each PSJV participant is required to contribute to PSJV expenditure in proportion to its joint venture interest. A PSJV participant is entitled to elect not to contribute to its share of PSJV expenditure at the beginning of a budget year. If it does so, it will be diluted under a customary dilution mechanism. If a PSJV participant’s joint venture interest reduces to less than 10%, its joint venture interest will be converted to a net smelter royalty (NSR) of 1.25% plus an additional 0.25% if the quarterly average gold price is above US$2,000 per ounce (CPI adjusted). The NSR is at a reduced level for production from the Strickland tenement (E45/4807) of 0.75% plus 0.125% if the quarterly average gold price is above US$2,000 per ounce (CPI adjusted) for so long as the Strickland Royalty (as defined below) applies over that tenement.
An existing 1.25% NSR applies over the Strickland tenement (E45/4807) in favour of Strickland Metals Limited (Strickland, ASX:STK), as the former holder of that tenement (Strickland Royalty). The Strickland Royalty is payable in respect of the first 420,000 ounces of gold (or gold equivalent) production from E45/4807 only. Strickland is also entitled to a pre-payment of that royalty on a decision to mine calculated based on the prevailing spot price for 42,000 ounces of gold (or gold equivalent).
Overview of the Project Tenements
Figure 1: Overview of the Paterson South Project
Eastern group of tenements
§ Budjidowns (E45/4815, 191km2) hosts several short strike length magnetic anomalies of similar size to the Havieron anomaly (which is associated with the SE Crescent’s magnetic massive pyrrhotite ore), which are untested or have only single drill holes testing the anomaly. Of particular interest is the Decka target (see Figure 2), a magnetic anomaly which also sits on the same gravity gradient as Havieron and has a coincident late time airborne electromagnetic anomaly interpreted as a bedrock conductor, indicating the potential presence of pyrrhotite as distinct from the less conductive but magnetic magnetite.
Figure 2: Decka prospect location with effective drilling on RTP magnetics
§ Basel (E45/5122, 639km2) adjoins to the north of Greatland’s Paterson Range East (E45/4928)2 tenement. A review of the historical drilling has identified two reverse circulation (RC) holes with +0.5g/t Au single metre assays at the Calypso prospect (see Figure 3) (CAW3-0 – 3.03g/t Au and CAW5-0 – 0.74g/t Au) likely in Permian cover and approximately 5.7km apart. These holes were originally targeted on anomalous surface sample results. Subsequent airborne magnetic and gravity surveys confirmed them as sitting on the margin of a magnetic granite. The target is prospective for intrusion related gold-copper mineralisation in the basement.
§ Wilki Lake (E45/5576, 32km2) sits over a NE trending break in the magnetic granite on a deep seated fault, approximately 8km east of and parallel to a similar structure seen at Telfer. Minimal exploration work has been conducted on the tenement, with an aeromagnetic survey completed, but limited on-ground activity. The area is considered prospective for intrusive related gold-copper mineralisation.
§ Skylar (E45/5351, 143km2) and Triangle South (E45/5532, 143km2) adjoin to the south of the Havieron (M45/1287) and Scallywag (E45/5316) tenements. They contain an anticline / syncline pair outlined by the magnetic base of the Wilki formation with Puntapunta and possibly Malu formation sediments interpreted in the core of the anticline. The tenements are considered prospective for Telfer style mineralisation.
2 Held by the Juri JV between Greatland (49%) and Newcrest (51%)
Figure 3: Eastern Group of tenements showing diamond and RC drill coverage over the tenure on magnetics.
Western group of tenements
§ Strickland (E45/4807, 424km2) is centred on the sub-cropping to shallowly buried Proterozoic, doubly plunging Paterson Dome Anticline fold. The fold is interpreted to contain Telfer Member sediments in the core. Gold mineralisation has been identified in surface sampling in the core of the NW Dome (Manuka) (Figure 4) with a peak of 2.67g/t Au and considered to be similar to Telfer mineralisation. Coherent copper mineralisation has been intersected in the Puntapunta formation on the NW margin of the SE Dome (Paterson Dome W) in shallow, 600m spaced rotary air blast drilling with a peak of 45m at 0.11% Cu from 68m to end of hole (GPW015). The mineralisation has been identified over a strike length of ~ 3km and is open to the northwest.
§ Telfer Domain (E45/4834, 147 km2) adjoins to the north of the Strickland (E45/4807) tenement. It contains similar stratigraphy and structure to that seen in the Strickland (E45/4807) tenure but appears to be under thicker cover.
§ Kaliranu (E45/5238, 57km2) overlies Proterozoic Mount Crofton Granites directly south of the Strickland (E45/4807) tenure. The granites are part of a series intruded along a 70km NE trending crustal break. The Geological Survey of Western Australia (GSWA) airborne gravity appears to show a slight magnetic upgrade where the intrusives crosscut the Paterson Dome anticline. Kaliranu (E45/5238) is considered prospective for intrusion related gold-copper style mineralisation.
§ Paterson 8 (E45/5242, 6km2) is a small tenement covering the Wilki / Puntapunta contact ~20km north of Telfer on an interpreted north – south structure considered prospective for intrusive related mineralisation.
Figure 4: Western Group of tenements on GSWA geology overlain on magnetics and displaying the Paterson Dome anticline, a Telfer correlative
Planned Exploration
The planned exploration programme for the financial year to June 2024 is intended to include:
§ Budjidowns (E45/4815): systematic drill testing of the Decka and Stingray targets following forward modelling of the magnetic anomalies to ensure the most effective drilling programme. Reviews of the remaining magnetic anomalies are underway to better target these anomalies;
§ Strickland (E45/4807): the Paterson Dome West and Chilly prospects will be targeted with drilling subject to heritage clearances; and
§ Basel (E45/5122): a heritage survey is planned for the Calypso prospect to enable regional scale drilling to basement utilising multi-element geochemistry both within the cover and basement to vector to source mineralisation.
Work is ongoing to identify and prioritise targets on the remainder of the Paterson South Project Tenements with testing based on their prospectivity ranking.
