Dundas Minerals (ASX: DUN) has sold four exploration licenses related to the Dundas Project in southern Western Australia to West Cobar Metals (ASX: WC1), receiving five million fully paid West Cobar shares and a $20,000 cash payment, while retaining the nickel, gold, and copper rights on the three northern tenements.
Figure 1: Dundas Project exploration licenses. The sale tenements are white, West Cobar tenements are blue.
The Strategic Sale
In the sale agreement between the neighbouring explorers, Dundas received a $20,000 cash payment and five million fully paid ordinary West Cobar Metals shares. These shares were valued at $430,000 based on the closing price of WC1 shares on Friday, September 22.
Additionally, Dundas retained exploration and development rights for gold, nickel, and copper on the northern tenements for a period of 24 months. This arrangement can be extended if future exploration activities identify measured or indicated mineral resources or economically viable grades of the retained minerals through drilling.
Dundas also has the option to independently explore for and develop the retained minerals.
Furthermore, the sale includes a provision for the potential relinquishment or non-renewal of certain northern tenements. During the 24-month exploration period for the retained rights, West Cobar is obligated to engage in consultation with Dundas regarding any proposed relinquishment of northern tenement areas and must inform Dundas of any intention to not renew a northern tenement.
This sale presents significant advantages for both explorers. Dundas is able to streamline its portfolio while retaining its interests in copper, gold, and nickel, and it also gains exposure to rare earth elements through its acquired shareholdings in West Cobar.
West Cobar Metals gains a strategic advantage by acquiring 451 square kilometres of contiguous land adjacent to its wholly owned Salazar Project, which already boasts an inferred and indicated resource of 190 million tonnes at 1,172 ppm Total Rare Earth Oxides (TREO).
The newly acquired land shares the same geological terrane as the Salazar’s Newmont deposit and holds promising potential for the discovery of heavy magnet rare earth mineralisation, mirroring the prospects of the existing Salazar Project.
Figure 2: Acquire tenements from Dundas Minerals to West Cobar Metals and potential for resource extension demonstrated through TMI RTP aeromagnetic image.
Finalisation of the sale is subject to standard conditions including any necessary shareholder and regulatory approvals.
Dundas has recently launched an independent exploration program in collaboration with Sensor Limited (ASX: S3N) to re-evaluate and model the Company’s airborne electromagnetic (AEM) survey data in the north-eastern sector of the Dundas Project area.
This initiative will leverage Sensor’s distinctive proprietary 2.5D airborne EM inversion service to pinpoint potential exploration targets for nickel and copper. These targets include those that were either previously unrecognised by Dundas Minerals or were considered to have low prospectivity.
This approach offers a fresh perspective on the region, providing enhanced imaging of the intricately folded geological structures, commonly found in hard rock mineral provinces, metamorphic belts, and deformed terrains.
This approach also enhances the clarity of near-surface, deep, and steeply dipping targets, providing Dundas Minerals with the opportunity to reassess potential exploration targets that might have otherwise gone unnoticed. Subsequently, the Company can formulate future exploration strategies for targets that receive a high prospectivity ranking.
Dundas anticipates receiving the program results in October 2023 and commits to promptly sharing them with the market.
In reference to the sale of the tenements to West Cobar Metals, Dundas Minerals Managing Director, Shane Volk, offered his perspective.
“Both Dundas and West Cobar benefit from this tenement sale transaction,” he said.
“For West Cobar, it provides a significantly enhanced search space for its rare earth elements (REEs) exploration. For Dundas Minerals, we obtain exposure to REEs via our shareholding in West Cobar, plus we retain the nickel, copper and gold exploration and development rights on the three northern tenements – where we recently initiated an independent nickel and copper exploration target generation program with ASX listed Sensor Limited.”
DUN’s Australian Stock Exchange-listed share price is currently trading at $0.069 (10:00am UTC+ 8 hours).