Completion of Farmin Joint Venture Agreement at the Bronzewing South and Kara Tenements
The Directors of Riedel Resources Limited “Riedel” are pleased to advise that the Company has completed a new joint venture agreement over its Bronzewing South and Kara tenements E36/215, E36/623, E36/509, E36/734, and M36/670 with Navigator Resources Limited “Navigator” through its wholly owned subsidiary AuDAX Minerals Pty Ltd ”ADXM”.
Mr Franzen Executive Director of Riedel said that “The proximity of these tenements to the Bronzewing Mill, and participation by Navigator as partner and manager, places us in a strong position to monetise any further exploration success.”
Background
Navigator (Bronzewing) Pty Ltd “Navigator”, ADX Energy Limited “ADX” and Hot Holdings Pty Ltd “Hot Holdings” are parties to a Farmin Joint Venture Agreement in relation to E36/215, E36/623 and E36/509 “Bronzewing South/Kara Tenements” dated 22 August 2007 “Previous Joint Venture Agreement” (as assigned to ADXM on 20 May 2010).
New Farmin and Joint Venture Agreement
On 14 March 2011 (being the commencement of the farmin), the parties entered into a new agreement between Navigator, ADXM (instead of ADX) and Hot Holdings (“New Joint Venture Agreement”), which replaces the Previous Joint Venture Agreement. The New Joint Venture Agreement amends some of the original farmin terms, expands the number of tenements to include the Delaney Well tenement (being E36/734) and an additional Bronzewing South tenement (being M36/670) in addition to the original Bronzewing South/Kara Tenements (collectively, the Tenements).
Under the New Joint Venture Agreement, the material terms are:
a) (Earn in): Navigator will be entitled to earn a 51% joint venture interest (Initial Interest) by incurring expenditure of $1 million on the Tenements within 4 years from the commencement date of the New Joint Venture Agreement (Initial Expenditure). The Initial Expenditure commences from 1 April 2010. Navigator will be entitled to earn a further 19% joint venture interest (Further Interest) (to acquire a total joint venture interest of 70%) by incurring further expenditure of $1 million on exploration within 2 years after earning the Initial Interest.
b) (Minimum expenditure - Initial Interest): Navigator may not withdraw from the New Joint Venture Agreement prior to earning the Initial Interest unless it has incurred minimum expenditure of $250,000, of which $50,000 must be expended on E36/734. After Navigator earns the Initial Interest the ownership of all the Tenements will be Navigator 51% and ADXM 49%.
c) (Minimum expenditure – Further Interest): If Navigator elects to earn the Further Interest, Navigator may not withdraw from the farmin for the Further Interest unless it has incurred a minimum expenditure in connection with the farmin of the Further Interest of $250,000, of which $50,000 must be expended on E36/734.
d) (ADXM Free carried): If Navigator earns a 70% interest, ADXM will be free carried on all further exploration up to commencement of mining on each Tenement and otherwise the parties will contribute to Joint Venture costs in proportion to their interest and dilution provisions apply.
e) (Pre-emptive rights): Normal pre-emptive conditions apply.
The Bronzewing South/Kara Project
The Bronzewing South/Kara Project is located within the Yandal Greenstone Belt approximately 65km north-east of Leinster and immediately south of the Bronzewing Mine site (See Figure 1). It includes tenements E36/734, E36/215, E36/623, M36/670, and E36/509.
To date, work at this Project has included: prospecting, airborne magnetic / DTM / radiometric surveys, ground electromagnetic surveys, regolith mapping, geological mapping, rock chip sampling, soil and lag sampling surveys, RAB / Aircore / RC and diamond drilling.
Until the discovery of the Bronzewing Mine in the mid 1990s, relatively little work had been done on the area. Since the grant of E36/215 in 2002, the area has been explored by Newmont Yandal Operations Limited “Newmont”, ADX, Independence Group NL “Independence” and View Gold NL / Navigator.
While results have generated a number of interesting anomalies and confirmed the geological prospectivity of the area, they have been disappointing in that they have not delivered a significant open pitable oxide resource. Model-driven exploration by Newmont and Independence, while generating a number of gold and nickel sulphide targets, meant that these companies did not follow up a number of targets.
The area is still considered to have excellent potential to host a small to moderate blind underground prospect. The area is under drilled relative to other areas within the eastern Goldfields and the Yandal Belt in particular. Due to its proximity to the Bronzewing Gold Mine, it is probable that material from any small resources would best be treated at the Bronzewing mill and is therefore best managed and explored by Navigator (Bronzewing) Pty Ltd, which owns the Bronzewing plant.
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