Jindalee Resources Ltd forms joint venture with GWR Group Ltd to develop Prospect Ridge, shares

As part of the agreement, Jindalee will retain its 30% interest in the building on a free-carry basis until a decision to operate has been made.

Jindalee Resources Ltd (ASX:JRL) has signed a binding term sheet with GWR Group (ASX:GWR) Ltd to sell a 70% stake in the Prospect Ridge Magnesite project in Tasmania for A$1 million in cash and in actions.

As part of the agreement, Jindalee will retain its 30% interest in the building on a free-carry basis until a decision to operate has been made.

The arrangement saw shares of Jindalee rise 9% this morning to A$2.50, while the company’s market capitalization is around A$127.14 million.

Agreement Terms

As part of the agreement, Jindalee, which holds a 100% beneficial interest in the project through its wholly owned subsidiary HiTec Minerals Pty Ltd, will sell 70% of its stake to Tasmanian Magnesium Pty Ltd (TM), a subsidiary to 100% of GWR Group (ASX:GWR) for total consideration valued at A$1 million.

Key terms include:

➢ Total consideration of $1 million, comprising A$250,000 in cash and A$750,000 in GWR shares;

➢ The 30% of HiTec are free to decide to operate the mine; and

➢ TM is required to spend a minimum of A$2 million and complete a scoping study within five years or 70% of TM reverts to HiTec and TM no longer has an interest in the project.

GWR to help develop the project

As part of its decision to continue to focus on key assets, including the McDermitt Lithium project in the United States and the Widgiemooltha Nickel-Gold-Lithium project in Western Australia, the company had actively engaged with potential partners seeking to advance Prospect Ridge.

“GWR has established expertise in mining and exporting bulk commodities and Jindalee is pleased to introduce GWR as a partner to help develop the project,” Jindalee said in the statement.

Low capex DSO operating potential

In a separate statement, GWR Chairman Gary Lyons said: “The GWR team has reviewed a number of projects that will move the business into the ‘green sector’, and we believe the advanced Prospect project Ridge Magnesite offers an excellent opportunity to enter the global “green” magnesium market while allowing GWR to apply our experience in bulk raw material mining and tap into our network of removal and processing partners. end users.

“The Prospect Ridge Magnesite Project has undergone a significant amount of work, including diamond drilling, metallurgical testing, environmental and Aboriginal heritage studies, and feasibility studies.

“We believe this could be a low capex DSO operation, which is close to a major deep sea port in Tasmania and the GWR team will be funded to accelerate the project with the aim of add significant shareholder value.”

Prospect Ridge Project

The Prospect Ridge project includes the Arthur River and Lyons River magnesite deposits.

The Arthur River deposit contains an inferred mineral resource of 25 million tonnes at 42.4% magnesium oxide at a cut-off grade of 40% magnesium oxide.

The Lyons River deposit, 6.5 kilometers to the south along strike of the Arthur River deposit, has a conceptual exploration target range of 40 to 60 million tonnes at 40 to 44% oxide. magnesium with a cutoff of 40% magnesium oxide.