Alien Metals shares were up 6.3% to 0.6p in late morning trading on Monday, after the company announced its 100% acquisition of the Vivash Gorge Iron Ore Project in Pilbara, Western Australia from ASX-listed mining company Zenith Minerals.
Alien Metals said it considered Vivash Gorge a strategic acquisition to its IOCA portfolio of direct shipping ore (DSO) projects based in Pilbara.
The Fortescue Mining Group (FMG) reportedly defined a high grade Iron Ore Mineral Resource of 28 million tonnes at 58.8% iron over neighbouring ground, labelled as the ‘Vivash SW resource’, which abuts the eastern central boundary of the Gorge tenement.
Alien Metals pointed out the positive results of FMG’s mining in the region, with its drilling up to the Vivash tenement boundary returning high grade results including 70 metres at 60.5% iron from the surface hole at hole VV0111.
The company estimated that the Vivash SW resource continued into the Vivash Gorge tenement, allowing for a ‘walk up’ drill target, based on geological mapping, proximity and strike of the the resource.
Alien Metals confirmed that several identical targets on strike within Vivash Gorge remained untested at the time of reporting.
Vivash Gorge covers an area of 47km squared, and is located 60km south of Alien Metals’ Brockman project, and 80km from the Tom Price township in southern part of the Brockman Syncline.
The mining firm commented that a programme of work for drilling up to 150 reverse circulation (RC) holes at a maximum of 200 metres each had been cleared for Zenith, which would allow Alien Metals immediate access.
The group said the addition of Vivash Gorge would bring it to a total of three strategically located iron ore projects within the Pilbara region, with a combined tenement package of 108k, and each surrounded by the iron ore majors bearing significant opportunities for further development.
Alien Metals confirmed a transaction consideration split between an upfront consideration of £56,500, which is set to be satisfied through the issue of Alien shares at the 10-day VWAP in advance of completion, alongside deferred consideration pending the achievement of certain milestones.
“The potential acquisition of the Vivash Gorge iron ore project from Zenith Minerals will be a great addition to our growing iron ore portfolio,” said Alien Metals CEO Bill Brodie Good.
“Given the adjacent DSO grade deposits defined by iron ore major Fortescue Metals Group, coupled with what we believe to be the tenement’s highly prospective yet untested geology, Vivash Gorge provides Alien with a third strategically located high grade iron ore project within the Pilbara region.”
“With drilling approvals already in place, we see the immediate potential to get on the ground and test the numerous targets that are on strike from Fortescue’s Vivash SW deposit.”