PanAust Limited plans an initial scout drilling program of 1000 metres at the Mahar San exploration project in Myanmar. The program, which will target six anomalies generated through ground electromagnetic surveys, is part of a farm-in agreement for Mahar San entered into with Metro Mining in December.
Mahar San is in the Sagaing Region of northern Myanmar, approximately 220km north-northwest of Mandalay. The project is at the southern extension of PanAust’s Wuntho Resources Company Ltd (WCRL) joint venture and lies within the Mesozoic to Tertiary Central Volcanic Magmatic Arc. It is prospective for various styles of copper, gold and base metal mineralisation.
The farm-in agreement was reached to enable Metro to remain focused on the development of its Australian bauxite resources.
In June 2016 Metro announced it had signed a joint venture agreement with an option to acquire 80% of Mahar San and was engaged in discussions with potential funding parties.
The farm-in provides for PanAust to progressively earn an interest in Metro’s Myanmar company by phased funding of exploration:
· PanAust has the exclusive option to explore the project for one year in exchange for funding all operating costs including an agreed drilling program.
· It then has the option to acquire 63.75% of Metro’s interest in the project for a further US$3 million expenditure on agreed exploration programs plus reimbursement of US$500,000 of Metro’s historical costs. It has the option to acquire an additional 18.75% of Metro’s interest for a further US$5 million expenditure on exploration.
· PanAust also has the option to purchase Metro’s remaining 17.5% interest for US$9.5 million. If it does not exercise the option Metro may elect to either contribute to its share of project expenditure or convert its interest to a 2% Net Smelter Royalty over production. This phase must be completed within 10.5 years of the date of execution of the agreement.
PanAust first visited the project in 2013 where small-scale mining activity was taking place. The prospectivity of the region was further developed through PanAust’s in-house exploration team and culminated in the decision to apply for large-scale exploration areas in the Wuntho Massif.
The opportunity to farm-in to the Mahar San Project presents an accretive value proposition for PanAust.
PanAust Myanmar director Richard Taylor said, “We look forward to working with Metro and welcome the opportunity to support exploration at Mahar San. The project shares synergies with PanAust’s other tenements in the Sagaing Region. As an emerging mining jurisdiction, Myanmar represents a great opportunity for the industry.”
PanAust is an Australian incorporated company which is owned by Guangdong Rising HK (Holding) Ltd, a wholly-owned subsidiary of Guangdong Rising Assets Management Co Ltd.