xstrata copper matrix joint venture

1131 Hay Street, West Perth, W.A. 6005 PO Box 1036 West Perth, W.A. 6872
Tel: (08) 9486 7100 Fax: (08) 9486 7300. Website: www.matrixmetals.com.au Email: [email protected]
14 September 2006
Manager Company Announcements
Company Announcements Office
Australian Stock Exchange Limited
Level 10, 20 Bond Street
SYDNEY NSW 2000
ABN 42 082 593 235
Electronic delivery
No of pages: 4
Dear Sir,
ANNOUNCEMENT
Xstrata Copper Matrix Joint Venture
Xstrata Copper to Spend up to $15 Million on
Earn-In to the McCabe Deposit
Matrix Metals Limited is pleased to announce that a joint venture agreement
has been signed with Xstrata Copper providing for Xstrata Copper to earn an
interest in the McCabe Deposit and the surrounding exploration permit (EPM).
The structure of the Joint Venture Agreement (JV) is as follows:
• Xstrata Copper has the right to earn a 55% JV interest by spending
not less than A$5m within a three year period.
• Xstrata Copper then has the right to earn a further 20% JV interest
during a sole funding period, by spending a further A$10m within a
further five year period or by completing a feasibility study during
the sole funding period.
• Matrix maintains 100% ownership of the tenements to a depth of
100 metres until a decision to mine is made at which time the JV
has the right to buy that part of the tenements at fair market value.
Over recent years, Matrix has successfully compiled a tenement holding
totalling approximately 5,000 square kilometres in the world class Mount
Isa/Cloncurry base metals province. This province hosts several world class
base metals deposits including Xstrata Copper and Xstrata Zinc’s Mount Isa
and Xstrata Copper’s Ernest Henry deposits, with Matrix’s specific target being
the continuation of the discovery of such deposits.
Matrix considers exploration for primary sulphide mineralisation as a key
objective in the strategic growth profile of the Company and commenced a longterm
primary sulphide exploration program in late 2004.
The building of the large and strategic tenement position over the past
several years, success in the discovery of significant zones of primary
sulphide mineralisation by Matrix at several prospects within those
tenements and Matrix’s ongoing independent exploration programs, all
reinforce the decision to joint venture with a Company of the stature of
Xstrata Copper. Xstrata Copper advises that the agreement is in line with
it’s stated goal of working with junior explorers to leverage its strong
asset and infrastructure base in north-west Queensland.
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Details of the Joint Venture Area & the McCabe Deposit
The area of the JV, totalling approximately 210 square kilometres and covering
tenements ML 90082 and EPM 14148, is located approximately 40 kilometres
south of Cloncurry as presented in Figure 1. It is noted Matrix’s total tenement
position in the Mount Isa/Cloncurry region totals approximately 5,000 square
kilometres.
Figure 1
Matrix ~ Xstrata Copper Joint Venture Area
The McCabe deposit, located approximately 8 kilometres from the White Range
Project’s Greenmount Deposit, currently comprises a resource that was recently
upgraded by 135% to 1.7 million tonnes @ 1.24% copper at a cut-off grade of
0.5% Cu. (ASX announcement dated 16 January 2006) The deposit is currently
part of the White Range Project and in accordance with the terms of the
Agreement, Matrix maintains ownership of the tenements to a depth of 100m
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allowing for ongoing exploration and as appropriate, the mining of oxide ore for
treatment at White Range.
Recent exploration work by Matrix has confirmed the growth potential of the
oxide zone of the deposit as demonstrated by the 2005 drilling programs that
resulted in the major resource upgrade.
Importantly this exploration work, that included limited deep drilling, has also
demonstrated the depth potential of the McCabe deposit in the area subject to
the JV. A drilling program in late 2005 reported significant copper intersections
at considerable depths including drill hole MMXRD 01 as presented below.
Drillhole Intercept
MMXRD 01 58 m @ 1.61% Cu from 211m
incl 27 m @ 2.93% Cu from 235m
incl 3 m @ 6.10% Cu from 235m
and 4 m @ 7.40% Cu from 245m
Figure 2 presents a summary of significant drill results reported from the 2005
drilling programs at McCabe.
FIGURE 2
McCABE DEPOSIT
2005 Drilling Program Highlights
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Matrix believes the joint venture agreement with Xstrata Copper
demonstrates the prospectivity and resource potential of the Company’s White
Range area tenement position.
The terms of the joint venture with Xstrata Copper maintain Matrix’s short term
plan of production from oxide ore and importantly, provides a mechanism for
the demonstrated primary sulphide potential of one of Matrix’s sulphide targets
to be tested in an appropriate manner.
Matrix looks forward to a long and mutually beneficial relationship with Xstrata
Copper in the world class Mount Isa/Cloncurry base metals province.
Yours Faithfully
Andrew Chapman
Managing Director
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on
information compiled by Bob Dennis. Mr Bob Dennis is a Member of the Australasian Institute of Mining and Metallurgy
and is a full-time employee of the Company. Mr Dennis has sufficient experience which is relevant to the style of
mineralisation and the type of deposit under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves, the JORC Code”. Mr Dennis consents to the inclusion in the report of the
matters based on information in the form and context in which it appears.