(MENAFN- ProactiveInvestors - Australia) Montezuma Mining Company (ASX: MZM) has reached an agreement for the sale of a majority stake in the Yalbra Graphite Project in Western Australia.
Buxton Resources (ASX: BUX) has acquired a three month option to purchase 85% of the Yalbra project.
Consideration for the option is $5,000 cash, with a further $5,000 to be paid if the offer is extended by three months.
If the sale proceeds, Buxton will issue 1 million shares to Montezuma in consideration for the 85% interest in Yalbra. Based on Buxton's current share price, this equates to about $95,000.
Montezuma will retain a 15% free-carried interest up to a decision to mine, following which the company can elect to contribute on a pro-rata basis or dilute to a 1% gross revenue royalty.
With demand for graphite heating up, Montezuma has picked a good time to realise the value of its graphite asset, while retaining exposure to the project in the long term.
Wide, high grade, near surface zones of graphite mineralisation have been identified over 4 kilometres of strike in historical trenches and drilling at Yalbra.
Buxton is planning a field work program to follow up on historical percussion drilling results, which include:
- 16.8 metres at 13.2% carbon from 15 metres, including 6.1 metres at 17.2% carbon;
- 23.5 metres at 19.5% carbon from 9 metres, including 15.2 metres at 25/2% carbon; and
- 39.6 metres at 10% carbon from 3 metres, including 12.2 metres at 23.6% carbon.
Buxton has set an exploration target for the project of between 8 and 12 million tonnes at 7% to 11% carbon.
Other projects
Montezuma is focused on progressing the Butcherbird Manganese and Copper Project, along with the Peak Hill and Mt Padbury gold projects.
Earlier this year the company announced the successful definition of high grade copper mineralisation over 600 metres of strike at Butcherbird, with potential to extend this along strike and at depth.
Meanwhile, a Scoping Study for the development of the extensive manganese mineralisation at the Butcherbird has identified potential for robust economics.
The Scoping Study projected a net present value of up to A$376 million, with an internal rate of return of up to 59%, based on the Yanneri Ridge JORC Inferred Resource of 64.7 million tonnes at 11.2% manganese.
At Peak Hill, Montezuma has a 500,000 ounce gold JORC Resource, which includes the historical Peak Hill Gold Mine.
The project is located within a 1 million ounce gold system, in a goldfield that has produced more than 900,000 ounces of gold.
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