Entrée Gold’s Blue Rose Joint Venture is selling the iron ore rights from the Blue Rose exploration property in South Australia to Bonython Metals Group for equity valued up to Aus$25 million.
Blue Rose is a joint venture between Entree's wholly-owned subsidiary PacMag Metals (51%) and Giralia Resources (49%).
Bonython, a private Australian company, has agreed to purchase 100% of the iron ore rights on the property in exchange for 6% of its future issued capital. It plans to seek a public listing within two years.
Bonython has secured an agreement with an Asian-based investment group to provide funding to facilitate its iron ore strategy.
Its stated goal is to consolidate existing tenements that cover a very large area of known and outcropping Braemar Iron Formation horizons as well as areas of near surface strong magnetic anomalies where interpreted Braemar Iron Formation may be covered by shallow soils and sand.
It intends to develop these new iron ore deposits into the largest magnetite project in Australia with a potential to exceed 10 billion tonnes of high-grade iron ore.
As part of this strategy, Bonython entered into an iron ore agreement with Carpentaria Exploration in early 2010. Carpentaria has a large ground holding about 60km to the east of Blue Rose. It can earn up to an 80% interest by investing Aus$53 million in cash payments to Carpentaria and spending Aus$28 million in exploration and feasibility costs in three separate stages.
Bonython has completed its stage 1 commitment by paying to Carpentaria Aus$5 million in cash and advancing Aus$8 million for exploration expenditures.
The Blue Rose joint venture covers an exploration licence in the Olary region of South Australia, 300km northeast of Adelaide. Magnetite iron formations occur in the southern portion of this 1000sqkm tenement.
Additionally, a copper oxide resource has been outlined in the north-central area of the Blue Rose tenement.
WASCO Mining Company plans to conduct mining operations in this area with PacMag and Giralia retaining a royalty interest. WASCO is a private Australian investment group owned 50% by a Chinese investment vehicle targeting copper production opportunities in Australia while having access to the Chinese copper market for sale of product.
WASCO can earn 100% of a 12sqkm area surrounding the Blue Rose copper deposit along with the rights to mine and process any mineralization extracted.
The PacMag–Giralia joint venture retains the rights to mineralization other than iron ore on the exploration license outside the 12sqkm WASCO agreement area.