Zenith Minerals Limited has accepted an offer to divest its 100 per cent owned Mt Alexander magnetite iron project to Mt Alexander Iron Ore Pty Ltd (MAIO), a private Australian-owned company.
Zenith will receive an up-front cash payment of $250,000 from MAIO, as well as 10 annual payments of $250,000 each (for a total of $2.5 million) until the project has reached commercial production, for a total consideration of $2.75 million.
Completion of the transaction is subject to and conditional upon the parties obtaining any consent or approval required under the Mining Act to the transfer of the tenements.
Zenith confirmed that the funds received from the sale of Mt Alexander will be used as working capital and applied towards further advancing the company’s project portfolio.
It will focus on exploration activities at its 100 per cent owned Split Rocks lithium project, which is positioned within the Forrestania greenstone belt.
The Mt Alexander Project is located 120 kilometres from the port of Onslow, and 260 kilometres south west of Karratha in the West Pilbara region of Western Australia.
Zenith previously discovered that magnetite iron mineralisation occurs in a banded iron formation (BIF) associated with a sequence of amphibolite, dolomite, schist and quartzite of Proterozoic age in the northern Gascoyne Province.
The company uncovered that the magnetite resource encompasses magnetite-bearing BIF units that trend parallel to each other over several kilometres of strike extent.
“The BIF units dip steeply to the northwest, with drilling and geophysical modelling indicating a depth extent of more than 400 metres,” Zenith stated.
The BIF units, up to 110 metres in true thickness, are hosted within a Proterozoic sedimentary package that was ductiley deformed during regional metamorphism and subsequently overprinted by small to medium scale ductile to brittle fault and fold structures.
The company reported a maiden Inferred Mineral Resource estimate for magnetite iron at the Mt Alexander West prospect in June 2015. That was at 25.9 million tonnes at 22.7 per cent iron.