Red October Resources (ROS)

Shares / Stock Code

ROS

Stock Exchange / Sharemarket

ax

Red October Resources Limited (ROS) is an Australian-based nickel and other non-iron minerals explorer. The company entered into a Farmin Agreement with Segue Resources giving it the right to earn up to an initial 70% interest in the Pardoo Project located in the Pilbara region of Western Australia by meeting expenditure of at least $10m within five years.

Red October Resources Limited is an Australian-based exploration company established primarily to acquire, explore, evaluate and exploit mineral resource projects including nickel and non-iron ore minerals at the Pardoo Project located in the Pilbara region of Western Australia. Red October has entered into a farm in agreement (Farmin) with ASX listed Segue Resources Limited (Segue, ASX: SEG) to advance exploration for nickel and other non-iron ore minerals at Segue’s Pardoo Project in the Pilbara region of Western Australia.

Segue’s Pardoo Project is located approximately 120km east of Port Hedland and 15km from the coast. The project is close to key infrastructure including an "open" railway, main road, gas and electric power. Abundant good quality ground water also exists in the Canning Basin immediately to the north-east of the Pardoo Project.

The Pardoo Project tenements contain magmatic and shear-hosted nickel, copper and platinum group elements (PGEs) with an Inferred Mineral Resource at the Highway deposit of 50.0 Mt at an average grade of 0.30% Ni, 0.13% Cu, 0.03% Co and 2.65% S, reported above a 0.1% Ni cut-off grade. The interpreted mineralisation is open down dip, and there is potential to extend the resource at depth and within the northern area with additional drilling.

The funds raised under this Prospectus will support the exploration and evaluation of the Pardoo Project under the Farmin and provide working capital whilst concurrently allowing the Company to continue to evaluate new project opportunities.

The Company has been actively evaluating new acquisition and joint venture opportunities in the resources sector including for example, gold projects in Kazakhstan and a copper project in Cyprus. Evaluation of these new projects is at an early stage and has not yet been concluded. The Company has not yet entered into any agreements in respect of these projects and there is no guarantee that it will do so in the future.

The Pardoo Project
The Pardoo Project consists of four granted exploration licenses; E45/1866, E45/2146, E45/3383 and E45/3464, in the Pilbara Mineral Field (Figure 5.0). These tenements cover approximately 161.2 km2 and are held 100% by Segue (Pardoo) Ltd, a subsidiary of Segue Resources.

In the late 1980s and early 1990s, mineralisation was identified within the Pardoo Project area by CRA Exploration Pty Ltd following extensive regional scale exploration. In 2004, Westralian Nickel Ltd (Westralian) was granted tenure over the Pardoo Project area. In 2005, Westralian failed to raise the minimum funds required to complete an IPO on ASX. In October 2006, Westralian shareholders voted to accept an offer from Segue Resources to acquire 100% of the issued capital in Westralian, and, in 2007, Westralian changed its name to Segue (Pardoo) Ltd, a wholly owned subsidiary of Segue Resources.

In December 2007, Mithril Resources Ltd (Mithril) entered into a farm-in and joint venture agreement with Segue (Pardoo) Ltd. Mithril did not meet the minimum annual expenditure requirement for 2010 under the joint venture and in January 2011 withdrew from the joint venture.

The Company will farm-in to the nickel and non-iron ore mineral rights at the Pardoo Project. The Company is required to invest $2 million during the first two years of the agreement. The Company can earn, in three stages, up to an initial 70% of the nickel and non-iron ore mineral rights at the Pardoo Project for expenditure of at least $10 million.

The Pardoo Project straddles the boundary between the East Pilbara Granite-Greenstone Terrane and the Central Pilbara Tectonic Zone, marked in this region by the Pardoo fault, which is part of the De Grey Structural Zone. The eastnortheast trending Pardoo Fault separates the Ord greenstone belt in the north from the Goldsworthy greenstone belt in the south. The project is centred on the northern, faulted limb of the Goldsworthy Syncline (Figure 5.1).

The mineralisation at the Highway deposited is hosted within a schist package, comprising biotite, chlorite, quartz, feldspar and carbonate schists. Chert lithologies occur above and below the schist and consist of grey, white and translucent banded and some brecciated chert. Above the chert-schist units the stratigraphy comprises fine grained mafic amphibole-biotite-chlorite schist, with accessory carbonate, magnetite and ilmenite.