Lease Approval Uncertain as Kairos Commences Critical Mt York Drilling
Kairos Minerals has finalized a pivotal mineral rights agreement with Pilbara Minerals, granting it extensive rights over key Pilbara licences and setting the stage for a significant drilling campaign to expand its Mt York gold resource.
- Kairos gains mineral rights (excluding lithium and tantalum) over 367km of Pilbara Minerals licences
- Plans 50-hole, 10,000m drilling program targeting 1,500m extension of Mt York Main Hill deposit
- Agreement includes 2% royalty to Pilbara Minerals on gross revenue from minerals recovered
- Second $10 million payment from Pilbara Minerals expected by end 2025, contingent on mining lease grant
- Cooperation framework established for exploration, infrastructure, and rehabilitation between Kairos and Pilbara Minerals
A Landmark Agreement in the Pilbara
Kairos Minerals Ltd (ASX, KAI) has taken a significant step forward in its Pilbara gold ambitions by signing a Mineral Rights Agreement (MRA) with Pilbara Minerals Ltd (ASX, PLS). This agreement grants Kairos all mineral rights, except lithium and tantalum, over three PLS exploration licences and one application covering a substantial 367 square kilometres. Central to this deal is a 1,500-metre extension of the Mt York Main Hill gold deposit, a key asset in Kairos’ portfolio.
Strategic Expansion and Drilling Plans
The MRA follows Kairos’ sale of non-core assets to PLS in mid-2024 and formalizes Kairos’ exclusive rights to explore and develop mineral resources on these licences. With early access granted to a defined ‘Priority Area,’ Kairos is poised to commence a 50-hole, 10,000-metre drilling program targeting the Main Hill Extension. This drilling aims to confirm and expand the existing 1.4 million ounce gold resource, potentially boosting the scale and economic viability of the Mt York project.
The drilling program is designed to be comprehensive, with reverse circulation drilling comprising the majority of metres and diamond drilling focused on detailed geological and metallurgical sampling. Kairos’ managing director, Dr Peter Turner, expressed confidence that this extension represents a continuous gold system that could elevate Mt York to one of the largest undeveloped free-milling gold projects in Western Australia.
Financial and Operational Terms
Under the terms of the agreement, Kairos will pay Pilbara Minerals a 2% royalty on gross revenue from minerals recovered and sold from the licences. Additionally, Kairos anticipates receiving a second $10 million payment from PLS by the end of 2025, contingent upon the granting of a mining lease application over the area. This payment will support Kairos’ ongoing exploration and development activities.
The agreement also outlines a cooperative framework between the two companies, allowing for shared infrastructure, coordinated rehabilitation efforts, and mutual access rights, albeit with Kairos having operational priority within the Priority Area. This collaboration could streamline exploration activities and reduce costs, benefiting both parties.
Looking Ahead
With drilling expected to commence imminently and continue through to December 2025, all eyes will be on the assay results and subsequent resource modelling. The data collected will be critical in updating the Mt York resource estimate and advancing feasibility studies. Meanwhile, Kairos continues negotiations with the Nyamal Aboriginal Corporation to secure a mining agreement, an essential step toward project development.
This agreement not only expands Kairos’ footprint in a prolific gold region but also underscores the company’s strategic focus on resource growth and project advancement. The coming months will be pivotal in translating this mineral rights acquisition into tangible value for shareholders and the broader Pilbara mining landscape.
Bottom Line?
Kairos’ new mineral rights and drilling program could reshape the Mt York project’s future, but success hinges on lease approvals and drilling outcomes.
Questions in the middle?
- Will the mining lease application for M45/1307 be granted on schedule to trigger the second $10 million payment?
- How will the upcoming drilling results impact the current 1.4 million ounce gold resource estimate?
- What are the implications of excluding lithium and tantalum rights from this agreement for Kairos’ long-term strategy?