Western Australia On 20 April 2007 Marathon announced a joint venture agreement with Primary Resources Limited (ASX:PRZ) allowing Marathon to earn up to 70% by spending $3.25 million within five years in Primary's Warburton project in Western Australia.
The venture will extend Marathon's uranium and polymetallic exploration activities in the State, with the tenements covering an area of over 1,000 square kilometres.
The Warburton project covers seven exploration tenements located near the South Australian border which are prospective for uranium, both IOCG (U-Cu-Au) and palaeochannel type. There is also significant potential for nickel and Platinum Group Elements (PGE), as well as diamonds, in the area.
Marathon will direct the overall exploration strategy while Primary will be the joint venture operations manager.
The agreement also provides for a pre-emptive right for Marathon to enter into an arrangement with Primary over its Egerton tenements, located to the west of the Warburton project.
Covering 1,048 sq km, the Warburton tenements are located in an area of strong gravity and magnetic anomalism and where the regional geology is indicative of extensive tectonic activity. The tenements contain prospective granites and a range of ultramafic to mafic rocks of Proterozoic age.
Additionally, sediments interpreted as Permian palaeochannel sequences potentially hosting uranium mineralisation (eg. roll-front deposit) in redox zones are developed within the tenements.
Significant uranium radiometric anomalies identified by Primary, are present on a regional and local scale, confirming the project area as an excellent uranium exploration ground and conceptual studies have identified several promising targets.
Initially areas with the anomalous radiometrics identified by Primary will be investigated by the joint venture, following the exploration approach applied in the North Flinders Ranges which identified the Paralana Mineral System.
Favourable geological settings for U exploration, with added potential for Ni, PGE and other commodities, including Cu mineralisation (present in tectonic breccia zones) are highly encouraging. An example of high potential for the metalliferous mineralisation is provided by the exploration of the nearby Nebo-Babel prospect by BHP Billiton, where intersections of 26 m @ 2.5% Ni, 1.8% Cu, 0.4 g/t Pt+Pd (Nebo) and 149 m @ 0.3% Ni, 0.4% Cu, 0.3 g/t Pt+Pd (Babel) were reported.
Under the terms of the joint venture, Marathon must spend $850,000 to earn an initial 15% interest in the joint venture and cannot withdraw beforehand. Marathon may spend a further $900,000 for an additional 40% interest (total of 55%), and a further $1,500,000 for an additional 15% (total of 70%).
Once Marathon has earnt its interest Primary can elect to dilute; once it dilutes to 25%, it may convert that interest to a 14% free carry to a decision to mine.
The Warburton Tenements are located on lands administered by the Ngaanyatjarra Land Council and approval of this transaction by the traditional owners of this land is required. Marathon may terminate the joint venture agreement if approval is not granted within 90 days.
