On 8 June 2018 Manhattan Corporation Limited (Manhattan) entered into a binding heads of agreement (Joshua Agreement) with Helix Resources Limited (ASX:HLX) (Helix) to drill test the advanced Joshua Copper Porphyry Project in Chile, South America (Joshua Project).
Manhattan will have the right to earn up to an 80% equity in the Joshua Project by carrying out 8,000m of diamond drilling and completing a Bankable Feasibility Study (BFS) over three stages.
The first stage and minimum commitment is an option where Manhattan must sole fund expenditure of AUD$1,000,000 with the aim of completing 3,000m of diamond drilling. (Figures 1 & 2).
The agreement gives Manhattan exposure to the significant upside of a potential new copper porphyry discovery in a world class mining destination:
- Discovered (2011) and 100% owned by Helix;
- Located 350km north of Santiago in the Coastal Belt, at low altitude and close to infrastructure;
- Large porphyry related alteration system – 6.5km by 2km;
- Coincident with large Induced Polarisation (IP) chargeable response;
- Alteration response similar to the Andacollo Cu-Au deposit (45km to NNW, 400mt @0.34% Cu) mined and operated by Teck;
- Only Central Zone Stockwork has been drill tested so far – confirms porphyry provenance;
- Drilling to date (16 RC-diamond holes) has tested less than 5% of the alteration system and less than 10% of +15mV/V IP chargeability anomaly; and
- Significant multiple intersections of copper mineralisation (+ Mo, Au) from the Joshua Central Zone Stockwork including:
- 400m @ 0.25%Cu;
- 352m @ 0.27%Cu; and
- 240m @ 0.22%Cu.
A recent technical review of the Joshua Copper Porphyry project by well-regarded geologist Mr Robert Perring has identified new and exciting drill targets seeking potential higher grade zones (>0.5%Cu) in the Joshua system which, if discovered, could potentially lead to a significant economic copper porphyry deposit discovery. Significantly 90% of the +15mV/V response, which surrounds the central stockwork is yet to be drill tested.
It is proposed Mr Perring will oversee and take on the role of technical advisor for the initial drill program, also joining the board of Manhattan as a Non-Executive Director.
Helix’s well established in-country exploration team have been retained to manage the initial proposed 3,000m diamond drill program.
Key Terms of the Joshua Agreement
A summary of the material terms of the Joshua Agreement are:
Helix has granted an option to Manhattan under which Manhattan must sole fund expenditure of $1,000,000 on the Project within 9 months of the commencement date, such expenditure to be expended on a proposed 3,000m diamond drilling programme (Option);
If Manhattan exercise the Option, then Manhattan shall have the right but not the obligation to earn up to an 80% JV Interest as follows:
Manhattan may earn a 51% JV Interest in the Project by sole funding the expenditure necessary to complete a further 5,000m of drilling within 18 months of the commencement date; and
At the completion of Stage 2, Manhattan may elect to earn a further 29% (giving it a total 80%) JV Interest by sole funding expenditure up to the completion of a BFS in respect of the Project.
At Stage 2, Helix will be entitled to a royalty equal to 1% of the net smelter return derived from of material removed from the Project; and
Helix will be the Manager of Stage 1. During Stage 2 and Stage 3, Manhattan will be the manager unless Helix and Manhattan mutually agree that Helix is to be retained as manager.
The Joshua Agreement
The Joshua Agreement is conditional on receipt of any regulatory approvals required under all applicable laws and regulations in relation to the entry into the Joshua Agreement and grant of the option within 3 months of the date of the Joshua Agreement; and
Manhattan raising a minimum of AUD$3,000,000 within 3 months of the date of the Joshua Agreement.
Geophysical Anomaly Backs Up Large System Concept
An IP chargeability anomaly is coincident with the alteration system and significantly 90% of the +15mV/V response, which surrounds the central stockwork is yet to be drill tested. This IP response is important, because it encompasses the ore and ore-related alteration phases of many porphyry-related mineral systems around the world.
Only Central Zone (Stockwork) has been drilled so far, a total area: 700m by 500m with only 16 RC-diamond holes in drilled into less than 5% of the alteration system area. From that “proof-of-concept” drilling, significant multiple thick intersections of copper mineralisation (+ Mo-Au) including 400m @ 0.25% Cu, 352m @ 0.27% Cu, 240m @ 0.22% Cu were returned.
Immediate Exploration Program
Drill the defined +15mV/V IP chargeability anomaly on notional 400m centres, targeting >0.5%Cu zones.