South Pacific forms JV with Teck, MM

Teck (TEK-T) and Australian-based MM Gold, a subsidiary of Meekathara Minerals, will join forces with South Pacific Resources (SHF-A) to explore two gold projects in Kalimantan, Indonesia.

South Pacific has an 85% interest in the Masao project (formerly known as Masupa Ria) and 90% in the Mirih project, with the remainder held privately by Indonesian business interests.

Over the past three years, South Pacific has spent US$4 million evaluating the two properties for epithermal gold and copper-gold porphyry-type deposits. Several mineralized targets have been identified.

Teck and MM Gold will have to spend US$3 million on each of the two properties in order to earn a 51% interest. Funding for the Masao and Mirih projects will occur over 24- and 36-month periods, respectively, with Teck and MM Gold jointly managing both. The two companies can increase their holdings to 60% by spending an additional US$1.5 million on both projects.

“This is an excellent arrangement for all parties.” says Robert Chase, president of South Pacific. “It allows Teck and MM Gold an opportunity to participate in the exploration of areas that have already shown exciting potential, and it assures South Pacific’s shareholders that two highly prospective contracts of work will be evaluated without further financial risk.”

Teck will also be required to cough up an additional US$200,000, which South Pacific spent previously on security deposits to the Indonesian government.

If development of a mineral resource is proposed for either property, South Pacific can instruct Teck to arrange for its portion of financing in return for an additional 10% interest.

The Masao project is in an altered Miocene volcanic complex situated next to Aurora Gold’s Mt. Muro mine in central Kalimantan. The property is divided into three districts, each of which has the potential to host bulk-tonnage and possibly epithermal vein gold deposits.

At the Mirih project, west of Masao, the partners will search for porphyry-hosted copper-gold deposits. The strategy is based on the discovery of anomalous copper-gold values in stream and soil sediment samples, as well as on the discovery of geophysical anomalies that are indicative of porphyry-type deposits.