Anglo American JV at Bell Rock Range Terminated
September 30, 2010
Australian diversified resources company Reed Resources Ltd (ASX: RDR)(“Reed”) advises that it has agreed to terminate the Option and Joint Venture Agreement with Anglo American Exploration (Australia) Pty Ltd (“AAE”).
AAE was not able to obtain Access Approval from the Ngaanyatjarra Council to conduct exploration on the tenement and the purpose of the option agreement cannot be realised, accordingly both parties have exchanged letters recording that the Option Period and Option Agreement are terminated.
Under the terms of the original agreement AAE could have earned 75% by spending A$3m on the Company’s 100% owned Bell Rock Range Project in the West Musgrave region of Western Australian.
Summary of the original Terms of the Agreement:
- AAE can exercise option and earn 51% equity by spending A$1m within 3 years;
- Upon AAE earning 51% equity it can elect to earn an additional 24% by additional expenditure of A$2m in an additional 4 year period; and
- Upon AAE earning 75% equity, Reed can elect to either contribute or dilute to a royalty of 2% Net Smelter Return (“NSR”) from gold and 1.5% NSR for all other minerals; and
- The Agreement is subject to executing an Access Agreement with Ngaanyatjarra council.
Bell Rock Range covers some 471 km2 within the western part of the Proterozoic Musgrave Block in central Australia (Figure 1). It is highly prospective for several commodities, particularly Ni-Cu sulphide and PGE mineralisation.
The Company will review all data generated by AAE and will notify the market on further developments shortly.
Geological aspects of this report that relate to Exploration Results have been compiled by Mr Craig Fawcett (MAUSIMM), a full time employeer of Reed Resources Ltd. Mr Fawcett has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being reported on to qualify as a Competent Person as defined in the Code for Reporting of Mineral Resources and Ore Reserves. Mr Fawcett consents to the inclusion in the report of the matters in the form and context in which it appears.