To help fund the exploration and development of the Troy Creek project, Empire Resources (ASX: ERL) has entered into a joint venture with Zodiac Resources for consideration of up to A$7 million.
Empire may receive an additional $5 million from the sale of the Troy Creek project, as the JV includes an option for Zodiac to acquire 100%.
Troy Creek covers 273 square kilometres in the northeast of Wiluna, in Western Australia, and is prospective for copper-gold-platinum.
Zodiac will acquire a 55% interest in Troy Creek by spending $3 million on exploration and development within three years, with at least $250,000 to be incurred within the first 12 months.
Zodiac can then increase its interest to 75% by expenditure of an additional $4
million on exploration and development of the project within five years.
The joint venture will provide the funding allowing Empire a more vigorous evaluation of the Troy Creek project.
Zodiac will be the operator, and is due to commence field work with the aim of building a solid foundation of data for discovering copper-gold and PGM deposits.
The terms of the deal also ensure Empire can concentrate on its copper-gold projects elsewhere in Western Australia, without incurring further expenses at Troy Creek, but with the upside potential if the project is sold.