Metal Hawk’s dominant partner, the $7.5 billion market capped IGO Limited will inject another $4 million into the duo’s Goldfields joint venture nickel operaton. The stage 2 deal will earn IGO an additional 24 per cent stake in the partnership.
After spending $3 million at stage 1, the latest move will lift IGO’s interest from 51 per cent to 75 per cent.
The earn-in and joint venture agreement encompasses Metal Hawk’s Kanowna East, Emu Lake and Fraser South projects in WA’s Goldfields where exploration activity is now due to significantly ramp up during the last two quarters of this year.
The agreement was inked between Metal Hawk and now delisted Western Areas in September 2020, before Metal Hawk listed and before Western Areas was formally taken over by IGO this week.
The $7.3 billion market-capped IGO paid $1.26 billion in cash for Western Areas and Metal Hawk sees the titan’s decision to follow through with the second stage of the existing agreement as a strong endorsement of the quality and potential of its projects.
Metal Hawk Managing Director Will Belbin said:“The election by IGO to progress to stage-2 is a tremendous outcome for Metal Hawk that will see a substantial step-up in exploration expenditure without drawing on shareholders’ funds.”
Metal Hawk remains free-carried to a decision to mine and will retain 100 per cent of the gold rights at Kanowna East and Emu Lake.
In addition, the company will be able to access all drill data compiled by IGO to help with its future targeting.
Diamond drilling at Kanowna East is due to recommence next month, targeting an interpreted southern extension of the ultramafic corridor hosting ASX-listed Poseidon Nickel’s high-grade Silver Swan deposit of 130,000 tonnes at an impressive 9.6 per cent nickel.
In February’s drilling program, the first drill hole at Kanowna East intersected a 220m interval of trace fine cloud sulphides to minor blebby stringers of sulphide from 560m to 780m downhole.
Less than 50km to the north-east at Emu Lake, moving-loop ground electromagnetic surveys are scheduled to start in the third quarter of this year. The surveys will cover areas of prospective ultramafic stratigraphy identified from recent air core drilling along strike from the high-grade Binti Binti nickel deposit.
Next month, Metal Hawk plans to commence a heritage survey at Fraser South to permit reconnaissance air core drilling slated for the third quarter of this year.
The price of nickel on the London Metal Exchange has cooled to its pre-hysteria levels of about US$25,000 per tonne in early March before prices topped US$100,000 during an unprecedented crisis and vicious short squeeze.
Whilst it appears nickel prices have returned to normal, Metal Hawk believes the fundamental market outlook for its chosen commodities nickel and gold is very strong.
According to the International Nickel Study Group, the global demand for nickel is about 3 million tonnes this year.
Due to its application in the burgeoning battery industry, the International Energy Agency predicts nickel demand could exceed six million tonnes by 2040.
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