Coppermoly to farm-in to Esk Trough Copper-Gold Project in Queensland

Coppermoly (ASX: COY) has signed an agreement with ActivEX (ASX: AIV) to farm-in to the Esk Trough Project in South East Queensland, gaining the right to earn a 51% interest with the option to advance its interest to 70%.

The terms of the agreement provide for Coppermoly to farm-in to the joint venture area by electing to sole fund exploration spending of A$3 million over three years to earn a 51% interest.

The minimum expenditure commitment is A$0.5 million in the first year, which is included in the A$3 million should Coppermoly elect to proceed.

On completion of the first $3 million earn-in the company can elect to continue sole funding the exploration program by spending an additional $3 million to earn a cumulative 70% interest in the area.

If and when Coppermoly has earned 70%, ActivEX can elect to claw back a 10% interest (40%) by sole funding $6 million of exploration expenditure. The joint venturers will contribute on a pro-rata basis if either Company discontinues sole funding.

Peter Swiridiuk, managing director, said “the Esk Trough Project has advanced exploration prospects which can be immediately drill tested. We believe that there is great potential to quickly add-value with a targeted drilling program in 2012."

Coppermoly currently has three copper-gold-zinc (molybdenum) properties in Papua New Guinea now being drill tested by Barrick Gold Corporation (NYSE: ABX, TSE: ABX). The company has three additional tenements under application in PNG.

Importantly, both the Queensland and Papua New Guinea projects have significant drill hole intersections, are accessible by roads and track and are close to existing infrastructure.

Esk Trough Copper-Gold Project

In the first twelve months the drilling program will be focused upon drill testing prospects that have already been identified by a combination of surface geochemistry, geophysics and historical drilling results.

At the Kakapo prospect within the Booubyjan tenement an intersection of 88 metres grading 0.47% copper and 0.49 g/t gold was obtained at 38 metres depth in a reverse circulation drilling program.

Diamond drilling will test this intercept to provide repeatable assay grades and reliable geological indicators for porphyry copper-gold mineralisation.

Nearby prospects Hinds, Kiwi, White Horse, and Bath have additional drilling targets.

Further geophysical and geochemical surveys will be applied to prospects on the other tenements if diamond drilling is successful.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/21086/coppermoly-to-farm-in-to-esk-trough-copper-gold-project-in-queensland-21086.html