Iron Ore Project, Western Australia (100% Laconia)
The Mooletar iron project is 100% owned by Laconia and comprises an area of 75km2 of folded Archaean greenstone belt. It is located near Mt Magnet in the Murchison region of WA, approximately 330km east of port of Geraldton and approximately 125km from the proposed rail line in the mid-west infrastructure corridor that would access the proposed Oakajee port.
Mooletar is situated over the eastern limb of the Mount Magnet greenstone belt and has a 5.2km long strike length, of two thick parallel bands of BIF mineralisation. The project area is accessible by sealed roads.
Mooletar Joint Venture
In August 2011 Laconia entered into a $7.5 million Joint Venture (JV) Agreement with Chinese syndicate, Sinoz Mining Investment Group Pty Ltd (Sinoz), for the exploration and development of the Mooletar project. Under the JV Agreement, Sinoz will invest $7.5 million within 24 months, over three stages, as follows:
Stage 1: An initial $1 million to fund an exploration program at the project. Laconia will also receive a payment of $250,000 of the initial $1 million investment as partial reimbursement of expenditure on the project to date. Laconia will undertake an RC drilling program of a minimum of 20 holes for 2,500 metres.
Stage 2: A further $1.5 million, which will give Sinoz a 50% interest in the JV. Laconia will aim to deliver a JORC Code Inferred Resource for the project by the conclusion of this stage, expected to be in 12-18 months from the commencement of the JV.
Stage 3: A further $5 million, expected to be within 12-24 months of executing the JV, which will give Sinoz an 80% interest in the JV. These funds will be used for further exploration, to deliver a JORC Code Indicated Resource and seek a Mining Licence for the project.
Laconia will manage the exploration at the project and hold a 20% free carried interest in the project up until a decision to mine. At that point if it elects not to contribute to fund the development of the project, Sinoz will pay Laconia 10% of the net value of the project (as mutually agreed by an independent valuation).
The JV pertains solely to iron ore rights at the project, and Laconia retains the mineral rights to gold and all other minerals. The JV Agreement is subject to Foreign Investment Review Board approval and other requisite approvals.
The project has two distinct high-grade Banded Iron Formation (BIF) units which have been identified over a 5km portion at the project area. Laconia has defined an Exploration Target at Mooletar of; 216-264 million tonnes of iron at an average grade of 30-35% Fe (Iron), confirmed in August 2010. The Exploration Target was confirmed as a result of two drill programs and a detailed mapping program completed over the project area.
Also, positive results from initial metallurgical test work have confirmed the potential for the project to produce a high grade magnetite concentrate. Results from Davis Tube Recovery (DTR) test work indicate that a high grade magnetite product may be achieved with grades up to 70.4% Fe, and low levels of phosphorus and silica. A Scoping Study has also been completed to evaluate the project’s exploration and development potential.
ASX Code LCR
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