AuKing Mining Ltd (ASX:AKN) has entered into a binding term sheet with Resource Mining Corporation Ltd (ASX:RMI) granting RMI an option to purchase all of its interests in joint venture arrangements established in Saudi Arabia.
The option has been provided to RMI with the permission of AuKing’s local Saudi JV partner, Barg Alsaman Mining Co (BSMC).
Under the terms of the Saudi JV, AuKing has the right to earn a 70% joint venture interest by incurring project-related expenditure up to the stage of a feasibility study for the particular project.
Two JV interests
At present, the Saudi JV has two project interests – the BSMC-owned project known as Wadi Salamah and the Shaib Marqan project issued by the Saudi Ministry of Industry and Mineral Resources.
An exploration licence was issued on November 11, 2024, for the Wadi Salamah tenement and steps are being taken to secure the Shaib Marqan licence.
AuKing’s managing director Paul Williams said that on November 27, 2024, the company announced a proposed transaction with Orion Resources Pty Ltd, which included the proposed earn-in of 15% of the Cloncurry Project interests in northwest Queensland via an acquisition of shares in Orion.
Focus on northwest Queensland
Since that announcement, the newly constituted board of AuKing has taken the decision that it cannot now direct resources and available funds to the new Saudi JV.
Due to the decision to focus efforts on the Cloncurry Project, and with permission from the BSMC, AuKing has entered into the option with RMI, providing for that company to assume AuKing’s position in the Saudi JV.
Term sheet provisions
Key provisions of the term sheet include:
- RMI has an option to purchase all of AuKing’s rights, obligations and interests in the Saudi JV, for a period of 30 days commencing after the grant by the Ministry of the Shaib Marqan licence;
- No consideration is payable by RMI to AuKing in respect of the exercise of the RMI option, other than RMI’s agreement to assume all of AuKing’s obligations under the Saudi JV; and (at its own expense and no cost to AuKing), RMI assisting BSMC to secure grant of the Shaib Marqan licence and the start of exploration activities at Wadi Salamah.
- In the event that the RMI option is not exercised, AuKing’s interest in the Saudi JV will automatically revert to BSMC, for no consideration.
Gold prospects
In March 2024, AuKing representatives participated in a site visit across various prospective areas in Saudi Arabia with JV partner, BSMC, including Wadi Salamah in central Saudi Arabia at which rock chip samples were collected.
The rock chips were sent to a Bureau Veritas assay lab in Jeddah, Saudi Arabia and some encouraging results were achieved, including 3.17 and 3.56 g/t gold.
While preliminary results, the significant gold assays are concentrated in an area to the south of the overall licence application.
These results provide an obvious area of initial focus for further exploration activities which will likely include a more detailed soil and rock chip sampling program and a geophysics survey.
Under-explored area
Shaib Marqan is also in central Saudi Arabia and covers 91.8 square kilometres. It is part of the Ar Rayn Terrane along the eastern margin of the Arabian-Nubian Shield (ANS), an area known to host multiple mineral systems and mineral commodities, including volcanogenic massive sulphide-hosted copper and zinc, epithermal and orogenic gold, and iron oxide copper/gold (IOCG) deposits.
The JV’s prospect is a relatively under-explored area of this terrane in proximity to several established deposits.
Based on the previous exploration work in the region, further systematic exploration activities could lead to the rapid generation of new precious and base metals targets.
Saudi Arabia’s mining expansion
Encouraging the JV is Saudi Arabia’s Vision 2030 reform agenda that has elevated the mining sector’s role in the Saudi economy, positioning it as a third key economic pillar as part of the National Industrial Development and Logistics Program.
The Kingdom’s focus on mining is driven by a desire to diversify the economy and increase non-oil revenue as it reduces dependence on oil.
Minerals are key inputs in many industries essential to Vision 2030 objectives, such as achieving a green transition, digitising the economy, becoming a global hub for technology and connectivity, producing nuclear energy, and localising military procurement.
The mining law that came into effect in 2021 targets the exploitation of the Kingdom’s mineral resources and the development of its mineral-based manufacturing industry, all of which are aimed at reducing imports by circa US$10 billion and generating more than 200,000 jobs by 2030.