With exploration soon to kick off at the Company’s recently acquired Canadian lithium projects, Sultan Resources is now putting the focus on its domestic projects, having entered into an option and joint venture agreement with mining giant Rio Tinto for a portion of Sultans Lake Grace Nickel-Cobalt-Gold Project in Western Australia.
Under the agreement, Rio’s subsidiary Rio Tinto Exploration Pty Limited (RTX) will be allowed to undertake the preliminary expiration of exploration licence E70/5082 during an initial option period, and are then able to earn up to 80 per cent interest in the licences by sole funding $2 million dollars in exploration activities, including a minimum of 1000 metres of RC and/or diamond drilling.
The initial option period for RTX’s preliminary exploration will be six months coincident with the explorer paying Sultan an initial $25 thousand dollars, with RTX having the ability to extend the option period by a further six months with the payment of an additional $25 thousand dollars to Sultan.
Following RTX meeting the minimum farm in expenditure, the two companies will form a joint venture for the licence, allowing Sultan to retain a 20 per cent holding in the Project and any production or profit generated by the Project.
The forming of the JV will allow the Company to maintain some hold on licence E70/5082 while letting the Company place majority of its focus at Kulin Hill, which remains the Company’s principal area of focus at the Lake Grace Project, which the explorer believes sits on highly prospective Nickel-PGM ground.
Initial drilling at Kulin Hill showed highly elevated levels of nickel up to 0.86% Ni within a 2.2 kilometre-long thick mafic-ultramafic sequence, with assays from a follow-up diamond drill hole confirming the target geology of a layered ultramafic intrusion and elevated levels of platinum group elements, further enhancing the prospectivity of the main target.
Moving forward, exploration at Kulin Hill will benefit from the 30-year experience of seasoned geologist and minerals industry veteran Craig Hill, who joined the Company earlier this week as its chief exploration manager and will bring his expertise in precious and base metals exploration to the Company as it ramps up work at Kulin Hill.
The Company said that exploration at Kulin Hill will further benefit from a recent placement which raised $1.5 million dollars, with funds from this placement being put towards further drilling of the West Australian project.
“We are pleased to enter into this arrangement with RTX and hope it leads to a mutually rewarding partnership. We will continue with our own exploration activity at our Kulin Hill tenure which we view as highly prospective Nickel-PGM ground, and with the recently completed placement and acquisition of lithium tenure in Ontario, Canada, it is shaping as a busy period for the Company,” Chairman Jeremy King said.
SLZ’s Australian Stock Exchange-listed share price is currently selling at 4.3c (11:04 am UTC+ 8 hours).