Havilah Resources Limited announced that it has signed a conditional binding Terms Sheet with OZ Minerals Limited in relation to a Proposed Transaction comprising an 18 month option to purchase Kalkaroo (Kalkaroo Option) and for a Strategic Alliance in the copper-rich Curnamona Province of northeastern South Australia. The basis is Havilah's large prospective tenement holding and previous exploration success in the region, combined with the accelerated funding and mining development expertise of OZ Minerals. OZ Minerals plans to conduct a Study Program on Kalkaroo over a period of up to 18 months that will focus on confirming and expanding existing mineral resources, optimising the project scale and value, and will include testing innovative approaches across the value chain applying OZ Minerals Modern Mining approach. The results will determine whether OZ Minerals proceeds with purchase of Kalkaroo for $205 million. OZ Minerals may elect to not exercise the Kalkaroo Option at any time during the Option and Alliance Period provided 5,000 metres has been drilled or a Shortfall Payment (metres not drilled multiplied by $400) is paid to Havilah. The Proposed Transaction provides for a deferred contingent consideration of $65 million upon a 30% uplift in Kalkaroo's current Measured and Indicated Resource estimate. There is also an additional copper price linked contingent payment in each year of production up to a maximum cumulative amount of $135 million that would be indexed to CPI Australia. Under the Strategic Alliance up to $9 million would be directed towards exploring copper targets within Havilah's surrounding highly prospective Curnamona Copperbelt over the next 18 months. This funding would allow Havilah to mount a major exploration campaign on numerous promising copper prospects that it has identified on its more than 12,000 km2 Area of Interest tenement holding Havilah has evaluated many possibilities for development of Kalkaroo and the Board believes the terms negotiated with OZ Minerals offer the best opportunity to date for Havilah shareholders to potentially realise fair value for the project. The Strategic Alliance provides Havilah with the financial means to intensively explore its Curnamona Province tenements for new copper deposits that would be complementary to, and supportive of, a new mining development at Kalkaroo. The Mutooroo copper-cobalt-gold project and the associated surrounding tenements are excluded from
the Strategic Alliance, as are Havilah's iron ore and uranium interests. These projects will continue to be progressively advanced by Havilah with the balance of the funding to be provided by OZ Minerals (up to $9 million over 18 months).