UXA 0.00% 0.0¢ uxa resources ltd

major copper producer to sole fund drilling on the

  1. 530 Posts.

    This demonstrates the prospectivity of the region where
    UXA is presently undertaking a drilling program IMHO
    _____________________________________________________________________________________
    www.gunson.com.au
    ABN 32 090 603 642
    ASX RELEASE
    2nd May 2006
    MAJOR COPPER PRODUCER
    TO SOLE FUND DRILLING ON THE
    MOUNT GUNSON COPPER PROJECT,
    SOUTH AUSTRALIA
    Noranda Pacific Pty Limited, the wholly owned subsidiary of major Canadian nickel-copper
    producer Falconbridge Limited, today signed an Option/Joint Venture agreement which gives it
    the right to sole fund $10 million of exploration and possibly development work on the Mount
    Gunson Copper Project in South Australia. Principal terms of this agreement are as follows:
    1 Noranda may earn a 51% interest in the Project by spending $3.5 million in 3 years from
    the date on which certain conditions precedent are satisfied. Noranda will not have any
    equity in the project if it fails to meet its expenditure requirements and may withdraw at any
    time.
    2 If Noranda earns its initial 51% interest, it may then increase its equity to 75% by spending
    a further $6.5 million in an additional 3 year period. Again, if it fails to meet this minimum
    expenditure target, its interest will not increase and will revert to 51%. Alternatively,
    Noranda may initiate a Joint Venture where it holds a 51% interest and Gunson 49%.
    3 Once Noranda reaches 75% equity, a Joint Venture would be formed, with Gunson having
    the right to contribute to ongoing expenditure at 25% interest. Alternatively, Gunson may
    elect not to contribute and be diluted in accordance with an agreed formula. However,
    Gunson may elect to recommence contributing to the Joint Venture at the commencement
    of subsequent budget periods.
    4 Once Gunson’s equity falls below 10%, it will cease to have equity in the Project but will be
    entitled to a net smelter royalty.
    The initial emphasis of Noranda’s exploration program will be to test the potential for a major
    copper-gold-uranium deposit at Chianti Prospect, where Gunson’s drilling program completed
    this year revealed an intersection of 2 metres at 3.4% copper.
    This drilling also confirmed a geological environment similar in many respects to the
    Carrapateena Prospect some 20 kilometres to the east, where another Canadian copper
    producer, Teck-Cominco will shortly commence a major drilling program to follow up an
    intersection of 67 metres at 3% copper announced in July 2005.
    D N HARLEY
    MANAGING DIRECTOR
    Investor Enquiries:
    Telephone: 08 9226 3130
    Facsimile: 08 9226 3136
    Email: [email protected]
    Website: www.gunson.com.au
    Address: PO Box 1217,
    West Perth, Western Australia, 6872
 
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