Magmatic (ASX:MAG) rockets with NSW Fortescue copper-gold farm-in

Magmatic Resources has increased its share price by 62 per cent after striking a $14 million farm-in and joint venture agreement with Fortescue for the Myall Copper-Gold Project in New South Wales.

Major miner Fortescue is set to spend up to $14 million over six years to earn a stake of up to 75 per cent while on its hunt for a tier-1 copper-gold deposit.

New Fortescue partner Magmatic Resources has already completed extensive exploration over Myalll Copper-Gold Project‘s Corvette and Kingswood areas, putting its maiden 110 million tonnes at 0.27% Cu, 0.07g/t Au and 0.8g/t Ag in place by mid-way through last year.

Magmatic’s drilling has since continued to impress, shining a spotlight on a large-scale porphyry system across the greater Corvette-Kingswood area where mineralisation remains open in all directions and at depth.

Fortescue appears to agree on the explorer’s belief it could hold a tier-1 asset and will now back Myall in with a cornerstone investment.

Magmatic Executive Chairman David Richardson said the company was excited to partner up with Fortescue to advance its exploration efforts across the project.

“Myall has many of the signatures of a tier-1 copper-gold deposit and Magmatic has recognised the need to partner with a major to further advance the project following the maiden resource,” Richardson said.

“Fortescue’s cornerstone investment in MAG will allow the company to simultaneously advance our other two projects at Wellington North and Parkes which are strategically located near Alkane Resources’ Boda-Kaiser deposits and Tomingley Gold Operations respectively.”

Fortescue also now has an interest in those other assets, with the major jumping in for a 19.9 per cent stake in Magmatic, buying in at 4.884 cents a share and raising roughly $3.71 million for the company.

The Andrew Forrest-led mining power will earn a 51% initial interest in Myall by spending $6 million for the initial four year earn-in period, beholden to spending at least $3 million on exploration.

Upon hitting that mark, a joint venture will commence in earnest, with Fortescue solely funding and managing exploration.

Magmatic’s fully owned subsidiary Modeling Resources will continue to be project operator for the initial period but if a decision to mine is made, Fortescue holds the pre-emptive right to purchase the subsidiary if it chooses not to contribute to development.

Magmatic was up 2.8 cents to 7.3 cents during morning trade to rest 1.9 cents or 47% to 6.4 cents by lunchtime.

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