Scorpion Minerals (ASX: SCN) has entered into a binding farm-in and joint venture heads of agreement with E79 Exploration, a subsidiary of E79 Gold Mines (ASX: E79), to acquire a majority interest in the Jungar Flats Gold Project in Western Australia’s Murchison region.
Under the agreement, Scorpion can earn up to a 70% interest by spending $3 million over five years. The first stage allows Scorpion to earn 51% by spending $1.5 million in exploration over three years, including a $100,000 upfront cash payment. A second-stage option enables Scorpion to increase its stake to 70% by spending a further $1.5 million within five years. The project spans approximately 60km along a shear corridor.
Scorpion has also raised $1.5 million through a share placement to sophisticated investors at $0.02 per share. This represents a 33% premium to the last traded price. The placement involved issuing 75 million shares, with 35 million under Listing Rule 7.1 and 40 million under Listing Rule 7.1A. Additionally, the company converted $332,000 in trade payables into shares, bringing the total number of new shares issued to 91.6 million. Investors will receive free-attaching unlisted options on a 1:2 basis, exercisable at $0.04 and expiring in one year. Director participation in the debt-to-equity conversion is subject to shareholder approval.
The Jungar Flats Project comprises eight exploration licences. Seven are held by E79 subsidiaries, while one (E51/1681) is owned by a Fenix Resources subsidiary, with E79 retaining the gold and mineral rights. Scorpion’s wholly owned Pharos Project, covering 924km² in the Murchison, is prospective for gold, lithium, and base metals, including the Mt Mulcahy deposit, which hosts a JORC 2012 Measured, Indicated, and Inferred Resource of 647,000 tonnes at 2.4% copper, 1.8% zinc, 0.1% cobalt, and 20g/t silver.
Scorpion plans to commence an RC drilling program at Jungar Flats in late February or early March. Recent E79 drilling identified high-grade gold targets, including 12m at 7.40g/t gold from 44m, with a 2m intercept grading 42.4g/t gold at Lantern, as well as 7m at 8.33g/t gold from 4m and 5m at 8.28g/t gold from 9m at Cap Lamp. The company aims to define further gold targets and develop a maiden mineral resource estimate.
Following the transaction, Scorpion is now the largest landholder along the Big Bell–Dalgaranga shear corridor, positioning itself as a major explorer in the region. The funds raised will support ongoing exploration, the cash payment to E79, and general working capital, while also enabling the company to assess further growth opportunities.
