The Koojan Project (LSA earning 75%) is located in the New Norcia region of Western Australia.  The Project is owned by Coobaloo Minerals Pty Ltd and covers a contiguous area of 600km2.  Koojan is located 80km north of the recent Julimar Ni-PGE-Cu discovery by Chalice Gold Mines Ltd, and is located in a similar geological setting.  The Project is located within the Western Gneiss Terrain of the Archaean Yilgarn Craton of south-west Western Australia.

Regional Geological Setting

The prospective mafic/ultramafic bodies are hosted within the Jimperding Metamorphic belt – a belt up to 70km wide and bounded to the west by the Darling Fault, and to the east by Yilgarn craton units.  The geology in the project area consists of laterite duricrust overlying weathered bedrock, with localised areas of outcropping dolerite units and granitic/gneissic units observed. The Project is located within a farming district with extensive seasonal cropping (wheat, barley, canola etc) and grazing that will impact on the geological exploration at times.

Lachlan Star has completed an initial site visit to the project to review the geological setting and zones of anomalous mineralisation.  The visit highlighted that areas of high-grade copper, nickel, cobalt and anomalous PGE mineralisation are associated with mafic intrusive rocks.  This will be an immediate focus of the exploration programme to continue to expand and define these areas for evaluation. The reconnaissance rock chip programme has consisted of samples dispatched to SGS and ALS for analysis or has consisted of analysis by handheld XRF in the field.  The sampling has returned anomalous results for Copper (up to 2.78% Cu), Nickel (up to 0.18% Ni), Cobalt (up to 1,740ppm Co), as well as anomalous values for zinc, lead and PGE elements.  The anomalous results require follow-up, and it is noted that in the reconnaissance stage a range of values from below detection to the upper limits were returned.

 

Transaction Consideration

Subject to Lachlan Star having incurred exploration expenditure totalling A$60,000 across the Project within a 6-month period, Lachlan Star will have earned the right to exercise the option to acquire an initial 50% ownership of Coobaloo and the Project.

Should Lachlan Star exercise the option to acquire 50% of Coobaloo and the Project, then on or before 23 December 2020, and subject to any required shareholder approvals, Lachlan Star shall issue to the vendors (or their nominee/s) 82.5 million fully paid ordinary shares in Lachlan Star and grant the vendors a 1% Net Smelter Royalty (NSR). Lachlan Star is entitled to a further 25% of Coobaloo by way of spending A$350,000 (inclusive of the initial expenditure) on the Project within 18 months (Additional Expenditure Commitment).