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Cove Resources to acquire Blenheim Resources, gain access to VMS, iron projects

Last updated: 17:12 31 Oct 2011 AEDT, First published: 16:12 31 Oct 2011 AEDT

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Cove Resources (ASX: CVE) has entered into a binding term sheet to acquire 100% of Blenheim Resources (ASX: BHR), giving it access to several highly prospective projects in Western Australia.

Blenheim has rights to acquire the West Australian projects pursuant to tenement acquisition agreements with a number of vendors. These acquisitions will be completed as part of the Cove transaction.

Consideration for the deal includes the allotment of more than three million shares and three million options, at an exercise price of $0.25 each, to Blenheim shareholders and 4.2 million shares and 2.1 million options to Blenheim portfolio tenement vendors, at the same price.

The companies are aiming to complete the transaction by the end of December 2011, and Cove Resources will begin exploration at the projects in 2012.

Blenheim’s project portfolio

Blenheim’s projects are located in Western Australia, with prospectivity for base metals, gold, silver and direct shipping ore iron ore.

Projects included in the agreement with Cove are the Quartz Circle and Mud Crab volcanogenic massive sulphide projects in the Pilbara region and the Gidgee Iron project in the Yilgarn region.

Quartz Circle contains widespread copper, gold, silver, zinc and lead mineralisation, with a small existing copper-gold Resource of 93,000 tonnes at 2.92% copper and 0.24 grams per tonne gold.

The Mud Crab volcanogenic massive sulphide project in the Pilbara region is prospective for copper, gold and antimony. It also has a strong geological and structural association of lead-zinc-silver and copper-gold-silver mineralised volcanogenic massive sulphide styles.

The Gidgee Iron Project in the Yilgarn region contains extensive iron formations and potential direct shipping ore hematite deposits.

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