Magmatic Resources Ltd. said Oct. 11 that it will no longer proceed with the proposed demerger of its four East Lachlan projects into Australian Gold and Copper Limited, a decision driven by investors reassessing the region, following the success of Alkane Resources Ltd. at Boda and feedback from Magmatic shareholders.
The company's board intends to develop a new exploration plan to refocus all of Magmatic's efforts on the East Lachlan projects. In particular, the short-term focus will be on the Wellington North copper project in New South Wales.
Magmatic terminated the acquisition of three gold projects in Western Australia, agreeing to pay the vendors North Iron Cap Pty. Ltd. A$25,000 in cash and 1 million ordinary shares; Ashburton Metals Group Pty Ltd, A$25,000 in cash; and Kokoda Exploration Pty Ltd, A$10,000 in cash.
The company has also agreed with Blue Cap Mining Pty. Ltd. to terminate the pre-production works agreement and funding agreement in relation to the North Iron Cap gold project in consideration for the issue to Blue Cap of 3 million unlisted options to acquire Magmatic shares at 10 cents apiece, with a three-year term.
Separately, Magmatic Resources said that it has agreed with Japan Oil Gas & Metals National Corp., or JOCMEG, to discontinue their joint venture agreement. 100% of the project and the two licenses, Alectown and Parkes East, will remain with Magmatic.
JOCMEG has spent approximately A$2.7 million on the project, which is in its third year.