Forrestania Resources has entered into an option agreement to acquire a prospective iron ore asset adjacent to Mineral Resources’Koolyanobbing iron ore operations in the rich Yilgarn region of Western Australia.
Under the option agreement, Forrestania can acquire 100% of the issued shares in Netley Minerals, the holder of one exploration licence and rights holder to two others.
Forrestania chair John Hannaford said the deal provides its shareholders with a near-term, advanced opportunity with significant scale potential.
“This is a compelling opportunity to explore for hematite in an ideal location with abundant existing infrastructure,” Mr Hannaford said.
Fast-track program
Following payment of an option fee, Forrestania will work with Netley to fast-track a drilling program testing a number of major hematite targets.
“The option allows us to drill-test the targets extensively prior to exercising so we can validate the significant iron ore targets modelled by the vendors,” Mr Hannaford said.
“If the drilling during the option period proves successful then, following exercise of the option, we can proceed directly with the drill-out of several substantial iron ore targets
Nearby infrastructure
The Netley property is located close to Forrestania’s Southern Cross and Forrestania areas and provides significant early development potential due to its proximity to MinRes’ Koolyanobbing operations.
“Its strategic location is in close proximity to the established MinRes facilities, including rail and mine infrastructure, potentially providing synergies and lowering future capital and operational expenditures,” Mr Hannaford said.
MinRes’ Yilgarn Hub is located in WA’s Goldfields region and incorporates the Koolyanobbing, Parker Range and Carina mines.
The company’s iron ore growth strategy includes transforming the Yilgarn Hub from a hematite to a magnetite operation, which will extend the life of the operation.
Product from Yilgarn is transported via road and exported through the port of Esperance.
Limited exploration
Outside of the mining licences controlled by MinRes, the new Netley project area has been assessed with limited electromagnetic surveys targeting nickel.
No modern exploration techniques have yet been applied to the target areas.
However, aeromagnetic imagery confirmed by surface mapping and sampling showed extensive banded iron formations.
Netley has approval to drill the Southern Target.
Heritage survey
An Aboriginal heritage agreement with the local native title claimant group is in place and a heritage survey is scheduled for early June.
The binding agreement is for a three-month option to acquire 100% of the outstanding shares of Netley for an option fee of $20,000.
During the option period, Forrestania will at its own cost undertake a drilling program for a minimum of ten reverse circulation holes on the tenements to an approximate depth of 90 to 150 metres each.
