Classification late in 2018 of Jericho as a new copper discovery prompted the joint venture participants to implement a new project funding model for Jericho related activities, whereby Minotaur’s share of costs shall be borne by OZ Minerals from April 2019.
Under a new structure, the Jericho Joint Venture, project interests were set at OZ Minerals 80% and Minotaur 20%, in return for which OZ Minerals now “loan carries” Minotaur through exploration, feasibility, project development and production, until Jericho achieves positive cash flow.
For illustrative purposes, the structure could alleviate Minotaur of its 20% component (or $50 million) of a project development total of, say, $250 million unless and until a commercial mining operation at Jericho eventuates. Minotaur’s loan facility attracts interest at the bank bill swap rate plus a 2% margin, currently about 3% (as at 1 August 2019).
OZ Minerals has appointed Minotaur as manager and operator of the joint venture. Objectives through to the end of 2019 include drill data compilation (some 7,500 mineralised drill intercepts) into a wire frame model and a preliminary block model for the centre sections of J1 and J2 lodes. Activities complementary to geological modelling will include baseline ecological studies, first-pass metallurgical testing and high level mining optimisations.
Jericho Copper-Gold Discovery
A ground EM survey conducted in 2017 delineated numerous basement EM anomalies, the largest of which – Jericho – measures 4km in strike length. The Jericho EM conductor lies 3-5km southeast of the Eloise copper-gold mine, along the same shear zone, but had never been drill tested previously (it is largely invisible in all other datasets). Eloise mine, currently owned by FMR Investments Pty Ltd, has been in operation for more than 20 years mining high-grade copper-gold lodes from underground and, curiously, Jericho tracks directly beneath the N-S mine access road.
Jericho JV area with drill hole locations and copper-gold lode positions
An initial 2-hole drill investigation of the Jericho anomaly, in October 2017, intersected strong sulphide mineralisation at the modelled EM conductor positions.
Follow up drilling defined two main sub-parallel copper-gold lodes, J1 and J2. J1 lode has a known strike length of 3.7km and J2 has around 3km of strike extent. By July 2019 a total of 96 holes for around 29,740m have probed Jericho, to 400-600m depth. J1 and J2 both show remarkable geological continuity, both along strike and down dip, where every hole to date has intersected mineralisation at the predicted down hole position.