Raiden Resources entices major nickel-copper player into strategic partnership at Mt Sholl

Raiden Resources enters strategic partnership with First Quantum Minerals over Mt Sholl project in the Pilbara
Canadian miner can earn up to 70% in the nickel-copper-PGE project
RDN to have a 30% free-carried stake up to decision to mine

Special Report: Raiden Resources has highlighted the attractiveness of its Mt Sholl nickel-copper-PGE project in WA’s Pilbara region by entering into a strategic partnership with Canadian miner First Quantum Minerals.

It follows the company’s acquisition of the remaining 20% project interest in the lithium-caesium-tantalum (LCT) and nickel-copper-PGE rights from Welcome Exploration, giving it full control of Mt Sholl.

While undoubtedly prospective for lithium given the success at neighbouring projects, Mt Sholl is also highly prospective for nickel-copper-PGE being just 10km from the historical Radio Hill mine.

Raiden Resources’ (ASX:RDN) licences cover part of the Mt Sholl layered mafic-ultramafic intrusive complex, which hosts widespread nickel-copper-PGE mineralisation in disseminated to matrix and stringer sulphides.

Over 80,000 meters has been drilled across the property, with multiple significant intercepts returned.

Trial mining carried out historically by Fox Resources saw some 25,000t of ore processed using a pilot heap leach plant at Radio Hill.

Mt Sholl currently has a resource of 23.4Mt grading 0.6% nickel equivalent containing 83,000t of nickel, 83,700t copper and 233,644oz of palladium-platinum-gold that remains open along strike and at depth across all four deposits.

It also has an exploration target of between 80Mt and 150Mt with a grade range of 0.45% to 0.75% nickel equivalent.

Generating value

The lure of nickel-copper-PGEs at Mt Sholl proved irresistible to C$6.7bn market cap First Quantum Minerals, whose Australian arm First Quantum Minerals Australia (FQMA) signed a memorandum of understanding (MOU) with RDN in relation to a strategic partnership.

Under the agreement, FQMA will pay the company $250,000 in cash and spend at least $1.5 million on exploration – including at least 3,000m of drilling – during the 12-month exclusive due diligence phase.

Should FQMA choose to proceed with the partnership, it will then have to pay RDN a further $750,000 and spend a cumulative $12m on exploration within three years of entering the first earn-in period.

The Canadian company can increase its interest in Mt Sholl to 70% by making a further cash payment of $4m – paid in equal $1m instalments on an annual basis – and spending another $25m on exploration within four years of entering this stage of the partnership.

A final payment of $5m will be made to RDN at the end of second earn-in stage.

Once FQMA makes a decision to mine, RDN will have the option to reduce its interest by a further 10% to 20%, in return for FQMA carrying its portion of development, co-contributing on a pro-rate basis its 30% stake, or diluting its interest down to a 1% net smelter royalty.

RDN also retains the rights to any gold or LCT discoveries on the project.

“This transaction is in line with our stated objective of generating maximum value for shareholders from our entire portfolio of projects, while management’s key focus remains the realisation of value from the LCT projects in the Pilbara,” RDN managing director Dusko Ljubojevic said.

“The Mt Sholl project is the largest, and currently the only open-pittable, nickel-copper-PGE sulphide resource in the district and may have the potential to unlock a district scale opportunity for development.

“The current resource and JORC Exploration Target are based on ~85,000m of drilling, along with other technical studies undertaken over the past several decades.

“Work to date has demonstrated the potential for an increase in mineralisation, with all deposits being open along strike and to depth.”

He added that FQMA not only had the ability to fund future exploration, it also has a wealth of technical experience in exploration and development of nickel-copper sulphide deposits.

 

This article was developed in collaboration with Raiden Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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