Caldera options out Tabletop’s base metals (March 19, 2002)

Australian-listed West Musgrave Mining has signed an option deal to acquire up to a 70% stake in the base metal portion of Caldera Resources‘ (CDR-T) Tabletop project in Western Australia.

The option agreement covers 83 sq. km, which have the potential to host base metal and gold mineralization. The agreement excludes land included under Caldera’s diamond joint venture with BHP Billiton (BHP-N).

WMM will pay Caldera A$20,000 and fund a A$30,000 ground gravity survey over priority targets on the property, situated in the east Pilbara region. If WMM completes the program, it can then earn a 51% stake by spending another A$300,000 over two years. WMM can raise its stake to 70% by spending an additional A$1 million over the subsequent three years. At that point, Caldera would have the option of converting its 30% interest into a 3% net smelter return royalty.

The property hosts several significant aeromagnetic geophysical targets. A ground gravity survey will follow up on the targets beginning in May.

Tabletop sits on an interpreted extension of crystalline basement rocks that extend from east Pilbara to the southeast into the Musgrave Block in the country’s central region.

Included in the project are up to 40 high-priority magnetic targets prospective for kimberlites or lamprolites. Limited drilling on six targets in September 2000 was highlighted by a 19-metre interval of ultrabasic material probably composed of lamproites and kimberlites.

Several other aeromagnetic targets are associated with heavy mineral anomalies, which include pyrope garnet/chrome spinel at one anomaly and microdiamond/chrome spinel at two other targets. Many other targets in the 20,800-sq.-km area remain untested.

These targets will be subjected to deep drilling in 2002.

Under an option deal signed late last year, BHP Billiton can earn a 51% interest in Tabletop’s diamond prospects by spending A$1 million over five years. The major can then up its stake by 19% by spending A$4 million over two years.

BHP Billiton will act as agent for the marketing of diamonds should the project enter commercial production.