Australia-based Jindalee Resources Limited (ASX:JRL) has entered into a binding farm-in JV agreement with Sabre Resources Ltd (ASX:SBR) over the Sherlock Pool exploration licence. The Sherlock Pool E47/4345 is situated immediately along strike to the southwest and northeast of the Sabre’s Sherlock Bay nickel deposit in Western Australia’s Pilbara region.
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Terms of the agreement
As part of the transaction, Sabre will pay A$7,500 in cash and issue 3.5 million SBR shares to Jindalee Resources on the signing of the Sherlock Pool Agreement. Then, Sabre will earn an 80 per cent interest by spending A$250,000 within five years, including a minimum expenditure of A$40,000 in the first year of the exploration licence term, prior to withdrawal.
Upon Sabre earning 80 per cent, Jindalee’s 20 per cent interest will be free carried to completion of a BFS (Bankable Feasibility Study), or equivalent. At 5 per cent interest, Jindalee’s stake reverts to an NSR (Net Smelter Royalty) of:
- 2 per cent NSR on nickel ore mined from E47/4345 (or succeeding tenements) and processed, with a head-grade of over 0.6 per cent Ni (nickel),
- 1 per cent NSR on nickel ore mined from E47/4345 (or succeeding tenements) and processed, with a head-grade of over 0.4 per cent Ni but less than 0.6 per cent Ni,
- 5 per cent NSR on nickel ore mined from E47/4345 (or succeeding tenements) and processed, with a head-grade of 0.4 per cent Ni or less.
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About Sherlock Pool Nickel Project – E47/4345
The Sherlock Pool exploration licence E47/4345 adjoins Sabre’s Sherlock Bay Nickel Project Mining Lease, M47/567, located in the West Pilbara of Western Australia.
Sherlock Bay contains an existing JORC 2012 nickel sulphide Mineral Resource (Measured, Indicated & Inferred) of 24.6 million tonnes @ 0.4% Ni (nickel), 0.09% Cu (copper), 0.02% Co (cobalt), containing 99,200 tonnes Ni, 21,700 tonnes Cu and 5,400 tonnes Co.
Sabre intends to rapidly advance exploration of the Sherlock Pool tenement, which includes detailed electromagnetic (EM) surveys to find potential massive nickel sulphide deposits, to be followed by aircore, then deeper reverse circulation and/or diamond drilling to test crucial targets. The discovery of massive nickel (+/- cobalt and copper) sulphides at Sherlock Pool is likely to improve the economics of Sabre’s Sherlock Bay Nickel Project, which is the subject of a Scoping Study, close to completion.
Jindalee shares closed the trading session at A$2.230 on 13 December 2021.
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