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Rox Resources enters binding term sheet with Cullen Exploration to earn up to 75% in Mt Eureka

Mt Eureka adjoins and increases the Fisher Project, which hosts 78,000 tonnes of nickel grading 1.9% across three deposits.

Rox Resources Ltd - Rox Resources enters into binding term sheet with Cullen Exploration Ltd, earning up to 75% interest in Mt Eureka
The Mt Eureka Nickel and Gold Project is about 600 northeast of Kalgoorlie in the northern Goldfields

Rox Resources Ltd (ASX:RXL) has entered into a binding terms sheet with Cullen Exploration Ltd which allows the company to earn up to a 75% interest in a 290 square kilometre tenement package.

This package, known as the Mt Eureka Nickel and Gold Project is along strike from Rox’s Fisher East nickel deposits (4.2 million tonnes at 1.9% nickel for 78,000 tonnes contained nickel), extending the exploration tenure.

Mt Eureka offers an opportunity for Rox to grow its nickel resources and expand its gold exploration with the project hosting gold mineralisation at the Galway and Southern prospects.

The company’s experience and knowledge gained from its exploration at Fisher East places it in a strong position to effectively explore and develop drill targets for the project.

“One of the most substantial nickel finds”

Rox’s managing director Alex Passmore said: “We are very pleased to be entering into this agreement with Cullen Resources at a time when the nickel market is strengthening.

“The Fisher East nickel project discovered by Rox is one of the most substantial nickel finds in recent times and with this acquisition, we aim to build on the substantial mineral resources already identified.”

The new tenure also contains substantial mineralisation including the Galway and Southern prospects.

Key terms

Key terms of the agreement include:

  • Rox may earn a 51% interest by spending $1 million on exploration expenditure within a three-year period;
  • Cullen will receive $40,000 cash upon satisfaction of one of the conditions precedent;
  • If Rox earns the 51% interest, it can elect to earn a further 24% interest by expending a further $1 million on exploration expenditure over a three-year period beginning at the end of the stage-1 earn in;
  • The company must spend a minimum of $333,334 and ensure the Cullen tenements are in good standing on a daily pro rata basis before it may withdraw;
  • Upon Rox earning 51% the parties will be associated in an unincorporated joint venture (JV);  
  • If Rox earns 75%, Cullen will be free carried with no liability for any joint venture costs until completion of a pre-feasibility study (PFS);
  • If Rox only earns 51% or earns 75% and completes a PFS Cullen must contribute to JV costs pro-rata or dilute under a standard dilution formula; and
  • If a participant’s interest falls to 10% or less that participants interest will be converted to a net smelter return royalty of 1% on those Cullen tenements.

Quick facts: Rox Resources Limited

Price: 0.026 AUD

ASX:RXL
Market: ASX
Market Cap: $37.91 m
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