FORTESCUE FARM-IN TO CANOBIE
The Canobie Project covers over 1,800km2 within the Mt Isa Eastern Succession and is highly prospective for IOCG and magmatic nickel sulphide given the proximity to the Quamby Fault Zone and Gidyea Suture Zone. These fault systems host several significant copper-gold deposits to the south including the giant Ernest Henry mine and the Mount Margaret, Eloise and Roseby deposits.
In June 2023 SER announced the execution of a Farm-In and Joint Venture Agreement with FMG Resources Pty Ltd (“Fortescue”), a wholly owned subsidiary of Fortescue Metals Group Limited to explore the Canobie Project in northwest Queensland.
The key terms of the Agreement include:
1. FMG may earn a 51% interest in the Canobie Project (Stage 1 Interest) by incurring $4M in expenditure on exploration which will include a minimum of 3,000m of basement drilling within the first three years. This includes a minimum obligation of $2.5M in expenditure on exploration within the first 2 years.
2. During the Stage 1 Period SER will operate and conduct all exploration activities as directed by the Exploration Committee which will comprise two members from each Party.
3. FMG may earn an additional 29% interest (for a total interest of 80%) (Stage 2 Interest) by incurring an additional $4M in expenditure on exploration over an additional 3 years which shall include a minimum of 3,000m of basement drilling (Stage 2 Period).
4. Co-contribution to expenditure may occur after FMG earns the Stage 1 Interest (FMG 51%: SER 49%) or the Stage 2 Interest (FMG 80%: SER 20%). If SER elects not to contribute, its JV Interest will be diluted according to industry formula
The first field season at the Canobie Project in partnership with Fortescue saw the successful drill testing of three new IOCG prospects with over 3,000 meters of drilling completed. Assays confirmed IOCG alteration and pathfinder elements with trace levels of Copper.
Exploration continues across 2024 with a significant ground gravity program and a diamond drill program to test multiple new targets scheduled for Q4.
