Tectonic and Mincor reach agreement

27 January 2007 | 06:09 Code : 12552 Geoscience events
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Mincor will pay Tectonic $700,000 in cash and subscribe for $1.3 million in Tectonic....

  Tectonic Resources NL has reached agreement with Mincor Resources NL to allow Mincor to earn an 80% equity interest in the RAV 8 nickel project (M74/13) by providing a $2 million upfront cash injection and spending $5 million on exploration over the next 3 years.

Mincor will pay Tectonic $700,000 in cash and subscribe for $1.3 million in Tectonic shares at an issue price of 13 cents per share for the right to explore the tenement, in return for which Mincor will earn 80% equity in RAV 8 by spending $5 million on exploration within a 3 year period.Tectonic will retain:· 100% ownership of the project prior to the full $5 million expenditure being completed;· the right to mine the existing resource at RAV 8 (within 50m of current mine workings);· the right to any nickel bearing material contained in the surface dumps;· ownership of the current mine infrastructure, being a flotation circuit and associated processing plant infrastructure, offices, workshops and power station.The agreement is subject to legal due diligence by Mincor.This transaction necessitates, a revised mine plan for Tectonic’s lead asset, the Phillips River Gold Project. Tectonic will now relocate the proposed processing facility from RAV 8 to freehold land adjacent to PhillipsRiver. The additional capital cost will be partially offset by no longer having to construct of a 16km haul road together with ongoing operational cash savings due to reduced haulage once in production.Steve Norregaard, managing director of Tectonic, said that this agreement with Mincor is consistent with Tectonic’s focus philosophy of becoming a producer with exposure to multiple projects across a spread of commodities.“Tectonic shareholders’ will retain exposure to the successful RAV 8 project while benefiting from a well funded exploration budget being undertaken by an aggressive nickel producer with a demonstrated track record of exploration success,” he said. The RAV 8 project is located in the Ravensthorpe region of Western Australia

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