Helix Resources Ltd (ASX:HLX) is extending its foothold in the highly prospective copper and gold region near Cobar in central New South Wales after agreeing terms for an earn-in joint venture agreement with Legacy Minerals Ltd.
This earn-in will enable Helix to undertake exploration for gold, copper, silver and base metals on Legacy’s Central Cobar Project, which is about 10 kilometres west of Cobar township and in the same highly prospective region as Helix’s other projects.
In prolific region
The two parties have signed a binding Letter Agreement setting out the staged earn-in and joint venture terms for the Central Cobar Project which is on Exploration Licence 9511 and covers about 308 square kilometres in an area hosting several operating gold, copper and base metal mines.
Central Cobar is only 10 kilometres from the Peak Gold Mine of Aurelia Ltd and 10 kilometres from the CSA Copper Mine of Metals Acquisition Ltd (ASX:MAC, NYSE:MTAL) and provides Helix with further exposure to high-grade Cobar-style copper-gold base-metal prospectivity.
“Exciting opportunity”
Helix’s managing director Kylie Prendergast said: “This agreement provides Helix with an exciting exploration opportunity located close to operating gold and copper mines and having the potential to discover Cobar-type mineralisation with several, well regarded, undrilled targets.
"We are pleased that Legacy has agreed this opportunity and recognised the local expertise that Helix can contribute here. We look forward to working with Legacy to hopefully make a new discovery on this underexplored piece of ground.”
Location of Helix-Legacy earn-in tenement (1) and other Helix Resources tenements (2-4).
Drill-ready targets
The project includes a suite of drill-ready targets and Helix intends to move directly into ground geophysics surveys to refine existing geophysical targets ahead of drill testing.
Helix’s exploration portfolio now boasts an exceptional set of drillable targets prospective for copper, gold and base metals in a well-established mining region close to infrastructure.
Legacy has delineated a series of defined Airborne Electromagnetic (AEM) geophysical anomalies, including Woggle, which is characterised by a coincident magnetic high and AEM conductor.
It potentially reflects disseminated magnetic pyrrhotite which is characteristic of alteration halos to Cobar-type deposits.
AEM has identified a subtle late-time peak anomaly that is coincident with the peak of the magnetic response. Ground truthing has confirmed the response does not appear to be related to a cultural feature and sits in an area of thin colluvial cover.
A series of AEM anomalies have been identified which are spatially associated with the regional Myrt Fault, a major NNW-SSE trending structure which can be delineated undercover from airborne magnetic data.
These anomalies are beneath thin colluvial cover sediments that can mask geochemical responses of buried deposits.
Legacy EL9511 and location of magnetic, geochemical and airborne electromagnetic geophysics targets.
The high-priority AEM anomalies identified are characterised by discrete and moderate-to-late time conductive responses that may be along strike of, or adjacent, to nearby anomalous geochemistry and sit in structural locations interpreted to be interpreted to be favourable for Cobar-type ore deposits.
Compelling targets
Legacy Minerals considers the AEM anomalies to present compelling targets and references Metals Acquisition Corp’s SEC S-K 1300 Technical Report Summary - CSA Copper Mine, Australia.
MAC had a total of nine lines of the same Xcite AEM survey covering an area which had previously been flowed with another airborne electromagnetic survey in 2001.
The comparison between the systems showed the 2001 AEM and high quality 2019 Xcite AEM data agree well in the early EM channels (0.4-1.2ms).
This data has been reliably used to identify and interpret geophysical signatures that might be associated with prospective structures and enhanced weathering due to sulphides at depth or lithological variations.
Next steps
Refine and test drill targets: Helix is planning ground geophysical surveys over up to three of the highest priority AEM targets - Woggle, Xcite 6, 40060A. Drill planning will be undertaken in parallel and commence as soon as possible subject to weather and contractor availability.
Follow-up AEM and geochemical targets: multiple other targets have been generated by Legacy (Figure 3) which will be systematically evaluated by Helix with fieldwork, auger geochemical sampling and geophysics.
Earn-in terms
The binding Letter Agreement sets out the staged earn-in and potential joint venture terms:
Helix Resources can spend A$2.8 million to earn an 80% interest in EL9511 in three stages:
- Stage 1 – $800,000 million over two years to earn a 51% interest;
- Stage 2 – $800,000 million over two years to earn a further 14% interest; and
- Stage 3 - $1.2 million over two years to earn a further 15% interest (up to 80%).
Minimum commitments include geophysics and 700 metres of drilling within 12 months.
At each stage, LGM has the option to contribute or dilute, and if LGM’s dilute interest drops below 10%, it will convert to a 2% gold Net Smelter Royalty (NSR) or a 1.2% NSR if base metal dominant.