South32 adds projects to AusQuest exploration alliance

Image: AusQuest

South32 is expanding its exploration partnership with AusQuest by providing funding for an additional four opportunities.

The two companies are now working together on 10 projects in Australia and Peru under the strategic alliance agreement (SAA) they formed last month.

South32’s acceptance of the opportunities has triggered the payment of a second bonus of $US500,000 ($635,000) to AusQuest, which will be used for ongoing project generation studies.

Under the terms of the SAA, South32 has exclusive rights to AusQuest’s projects by funding selected projects up to the drilling stage. It can also elect to spend a further $US4 million on each project to earn a 70 per cent interest, with the right to earn an additional 10 per cent stake by completing pre-feasibility studies.

AusQuest estimates that in excess of $6 million will be provided under the SAA and other agreements in 2018 to advance its projects, including drilling in at least five areas.

In Peru, AusQuest has drilling programs planned for the Chololo and Cerro de Fierro copper projects, while in Australia further drilling is planned at the Blue Billy zinc prospect.

AusQuest managing director Graeme Drew said the company’s SAA with South32 was continuing to work effectively in generating a strong pipeline of high-potential project opportunities.

“Confirmation of ongoing funding for existing projects and the inclusion of five new projects as part of the SAA is a great outcome for AusQuest and a resounding endorsement of our technical expertise and hard work, as well as the strong working relationship we have developed with South32,” he said.

“Of course, drilling remains the key to success, and we are keenly awaiting approval for our major upcoming drill programs in Peru so we can test the large copper-gold targets we have already defined in southern Peru – the home of many large porphyry copper deposits. This should not be too far away.”