Join our daily newsletter At The Bell to receive exclusive market insights
ASX-listed microcap explorer Magmatic Resources’ (ASX:MAG) shares were up 40% out the gate on Friday as Fortescue snatches up a 19.9% stake.
Andrew Forrest’s mining empire has its eye on Magmatic’s Myall project in NSW, predominately a copper play.
Fortescue is to snatch up 75.9M shares in MAG while Magmatic will “remain the operator during the initial farm-in period of up to four years.”
A Fortescue spokesperson told The Market Online the acquisition is part of the company’s future-looking electrification and decarbonisation plans, which investors will likely recognise harmonises with the still-somewhat-recent genesis of Fortescue Future Industries (FFI.)
“We are always looking for future growth opportunities through our exploration pipeline,” a Fortescue spokesperson said.
“The farm-in agreement and investment are consistent with Fortescue’s exploration strategy to target opportunities and commodities that support electrification and the energy transition, and this includes a focus on copper.”
A 19.9% stake is just short of the level wherein Fortescue would need to lob a takeover offer.
Fortescue, for its part, will spend $14M between now and 2030 to earn up to a 75% JV interest.
In July last year, Magmatic released an initial JORC resource underpinning a possible 293,000 tonnes of copper; 237,000 tonnes of gold and 2.8M ounces of silver.
“Fortescue’s cornerstone investment in MAG will allow the Company to simultaneously advance our other two projects at Wellington North and Parkes which are strategically located near Alkane Resources Boda-Kaiser deposits and Tomingley Gold Operations respectively,” Magmatic chairman David Richardson said.
“Myall has many of the signatures of a Tier 1 copper-gold deposit and Magmatic has recognised the need to partner with a major to further advance the project following the maiden Resource.”
Magmatic shares were up 38.64% to 6.1cps first thing in Friday trades, per CBOE live pricing.
