Fortescue Metals Group has established a farm-in and joint venture agreement with Reward Minerals for exploration in the McKay Range in Western Australia.
The JV will explore two tenements held by Reward subsidiary Holocene. They are located immediately north of Lake Disappointment in the Little Sandy Desert in the Pilbara region.
Fortescue, which will operate the farm-in and JV, has the right to earn an 80 per cent interest in the tenements by spending $2 million over four years, with a minimum obligation of $400,000.
Once Fortescue has spent $2 million, the JV will be established and both parties will contribute to expenditure in accordance with their respective JV interests or dilute.
Reward, via Holocene, will retain all rights to evaporative minerals such as potassium and magnesium on the tenements. It has also been granted potash rights on two of Fortescue’s nearby tenements, E45/5360 and E45/5361 for a small sum.
In addition to this, Reward’s rights related to the Lake Disappointment sulphate of potash (SOP) project infrastructure requirements are protected under the agreement.
The Lake Disappointment area is highly prospective for potash resources and other evaporative minerals, due to the potassium-rich brines found in its sediments.
Reward started helicopter exploration of the area in 2015 and exploratory drilling in 2017, now chief executive officer Greg Cochran is excited to work with Fortescue to further open up Lake Disappointment’s potential.
“We are pleased to have been able to finalise this agreement with Fortescue, which opens up these prospective tenements for further exploration,” Cochran said.
“We are all aware of recent exploration successes in the region and believe that Fortescue will be an excellent partner to explore these tenements.”