The two will jointly explore seven exploration licenses in the far western Coompana province.

OZ CEO and managing director Andrew Cole said Mithril’s experienced team had a proven track record in the discovery and development of nickel and copper deposits in Australia.

“The area that OZ Minerals will be exploring with Mithril is real frontier country,” he said.

“It is exciting greenfields exploration in rocks that are comparable to those just across the border that are known to host major mineral deposits.”

The agreement came after the SA government’s PACE initiative collected and released a geoscientific data set over the region, which included high-resolution aeromagnetic seismic survey and magnetotelluric data.

“This new wave of exploration aligns with the state government’s Plan for Accelerating Exploration which is aimed at unlocking South Australia’s plentiful natural resources,” Cole said.

An extensive ground gravity survey is planned for the December quarter.

Mithril will conduct target generation initially, with OZ contributing $A250,000 for the work.

Mithril MD David Hutton said the company was looking forward to getting on the ground.

“This partnership will leverage the combined strength and knowledge of OZ Minerals and Mithril,” he said.

The deal continues OZ’s recent trend of doing exploration farm-in deals with Toro Energy over Mt Keith nickel in Western Australia, with Minotaur Exploration over copper targets in Queensland and around OZ’s Prominent Hill mine in SA, and with Carube Copper in Jamaica.

Mithril shares jumped as high as 1.1c, but last traded over 28% higher at 0.9c. OZ shares dropped 2.6% to $6.44.