On 2 August 2011, SXG entered into an agreement with Western Areas NL whereby Western Areas acquired 70% of the Company’s nickel rights across much of SXG’s tenement package. The agreement with Western Areas excludes some tenements including the tenements at SXG’s Copper Bore project and the Company’s non-iron rights on Radar Iron’s tenement north of Copper Bore.
Previous exploration undertaken by SXG and others has resulted in the identification of multiple nickel sulphide targets within the Bullfinch North tenements, which include a 66 km strike length with known favourable nickel sulphide host rocks (olivine cumulates).
These include multiple targets, some with known drill intersections, such as Trough Well, Lady Agnes, Scorpio and Sirius. At Trough Well, previous RC drilling has intersected multiple zones of nickel sulphides within a classic Kambalda-style setting including an intercept of 20m @ 0.62% Ni including 4m @ 1.41% Ni.
SXG’s agreement with Western Areas ensures that appropriate focus and resources are allocated to testing the nickel potential of the Marda and Southern Cross tenements, while also providing SXG shareholders with a highly leveraged exposure to any exploration success.
The agreement has been structured in such a way that SXG retains exposure to any future nickel exploration upside by retaining a 30% interest in any nickel mineralisation discovered.
SXG believes that its tenements hold some of the best under-explored nickel ground in WA, hosting two of the highest grade nickel deposits in the world – Flying Fox (2Mt @ 4.7% nickel) and Spotted Quoll (2Mt @ 6.2% nickel), both owned by Western Areas. These deposits lie approximately 190 km south of SXG’s tenements.
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