This demonstrates the prospectivity of the region where UXA is...

This demonstrates the prospectivity of the region where
UXA is presently undertaking a drilling program IMHO
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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