Mongolata (Au, Au-Cu)The Mongalata tenement, EL 3164, covers the old Mongalata Gold Field, where early mining yielded some 10,000 ounces of gold with an average grade of about 50 g/t Au.
Stretching over 374 square kilometres in the Central Flinders Ranges, the Mongalata project has been established to search for gold and copper ores related to Cambro-Ordovician granitoid intrusives, either as porphyry style, skarn replacement, or structurally controlled mineralisation.
Exploration work conducted during fiscal 2006 included a calcrete and partial leach soil sampling program as well as a gravity survey over the same area. The soil sampling program showed up several areas of anomalous values when analysed through a proprietary multi-element response algorithm.
The integration of magnetic and gravity data shows the area adjacent to the granitic intrusive is highly segmented. The interpretation of the follow-up geochemical responses will take account of this fracturing of the bedrock.
On 9 November 2007, Marathon announced a joint venture covering the eastern portion of EL 3164 with Australian Field Services Pty Ltd (AFS). AFS can earn 90% equity by spending $180,000 over three years, with Marathon’s interest free carried to completion of a bankable feasibility study. AFS can withdraw from the joint venture after spending a minimum of $60,000 on joint venture expenditure in the first 12 months.
Marathon has the option of earning back a 65% interest in the joint venture by reimbursing AFS three times its joint venture expenditure since commencement of the joint venture.
Following that arrangement, Marathon has agreed to sell to Phoenix Copper Limited all of its interest in the Mongolata Project, including the eastern portion subject to the joint venture with AFS, located near Burra, South Australia.
Phoenix is an unlisted public company intending to undertake an initial public offering to raise $10 million with a minimum subscription amount of $6.0 million and the right to accept a further $2.0 million in over-subscriptions by the issue of shares at a price of 20 cents per share. Phoenix has advised Marathon that it plans to lodge the prospectus with ASIC during November and expects to be listed on the Australian Securities Exchange by the end of January 2008.
Marathon’s agreement with Phoenix to sell EL 3164 is conditional on the IPO being successfully completed. If that occurs, Marathon will receive for EL 3164, 750,000 shares and 750,000 options, each exercisable at 25 cents for one share in Phoenix Copper, together with a 2.5% net smelter return royalty in respect of minerals derived from the western portion of EL 3164.
As part of the arrangement with Phoenix, Marathon shareholders have been granted the right to participate in a priority offer under the Phoenix IPO. The terms are:
- 15 million shares will be offered in priority to eligible Marathon shareholders;
- only shareholders who hold Marathon shares at close of ASX trading on 19 November 2007 and who reside in Australia will be eligible for the Priority Offer;
- each eligible Marathon shareholder will be entitled to apply for up to 250,000 shares under the Priority Offer; and
- all applications will be treated on a first come first served basis and the final allocation decisions will be at the sole discretion of the Phoenix board.
