Interview with Managing Director, Richard Bevan regarding the $36m JV with OZ Minerals for the West Musgrave project.
TSI Comment: This is a fantastic result for Cassini, as it not only validates the potential of the WMP by bringing in a partner of OZ Minerals stature, but also significantly reduces the financial risk associated with the projects development.
OZ Minerals has a reputation for being extremely diligent with their acquisitions, as they only target projects they believe have the potential to be tier one assets. We also understand this is the largest transaction OZ Minerals has entered into over the past number of year. Both of these factors go a long way in validating our belief of the significant potential that exists at the WMP.
The largest risk we previously associated with the development of the Nebo-Babel project was finance risk, given the significant capital requirement, the current environment for base metal project and Cassini’s market capitalisation. This risk has now been reduced, given the financial backing that a partner of OZ Minerals calibre brings to the WMP and should ensure that when market conditions improve, the WMP will be at the front of the queue for development.
We also note one of the key terms of the JV was a minimum of $8m expenditure on regional exploration. This should help unlock the potential for other discoveries in the region.
Finally, as Cassini is now free carried through to a decision to mine, the financial constraints on the company exploration activities at their other projects has been reduced. This should see increased exploration at these projects in the near future.
