China-backed mining play A-Cap Resources has launched an $11 million joint venture with Blackham Resources, with the ASX-listed exploration firms to explore the development of the Wilconi cobalt-nickel project near Wiluna in Western Australia.
A-Cap announced to the ASX today that it had entered a binding term sheet with Blackham to acquire a 75 per cent farm-in interest in the Wilconi project, which covers a total area of 490 square kilometres and comprises seven mining leases.
The companies will now negotiate a final joint venture framework which is expected to be announced within 45 days.
The deal remains subject to Foreign Investment Review Board approval, consent from Blackham Resources financing partners and approval from Western Australia’s Minister for Mines and Petroleum Bill Johnston.
A-Cap, which counts Chinese groups Ansheng Investment Co and Jiangsu ShengAn Resources Group Co as its major shareholders, implemented a diversification strategy late last year to complement its core asset, the Lelthakane uranium project located in Botswana.
The Wiluna farm-in agreement is the second such deal for A-Cap in 2018, after it entered a similar term sheet with Castillo Copper to explore and develop nickel and cobalt tenements in Queensland in July.
An earlier deal to farm into a Queensland nickel-cobalt operation owned by private firm ARC Marlborough was terminated in July following due diligence on the operation.
A-Cap chairman Shen AnGang said the company’s strategic relationships would be crucial in its diversification strategy, particularly those with its major shareholders, which are working with the company to identify opportunities to participate in the supply hcain for battery-making materials, including cobalt.
“The A-Cap board continues to engage with potential strategic investors resident in China who are working with A-Cap to support its capital management plan for new cobalt project acquisitions and initial resource exploration work,” Mr Shen said.
Blackham Resources chairman Milan Jerkovic said the deal would allow the company to focus on the development of its core asset, the Matilda-Wiluna gold operation.