Red Metal Ltd (ASX:RDM) has signed a multi-project option and joint venture agreement with OZ Minerals Ltd (ASX:OZL) aimed at fast-tracking the search for greenfield discoveries on Red Metal’s Australian base metal exploration portfolio.
The new greenfields discovery alliance agreement provides OZ Minerals with a two-year option to fund a series of mutually agreed, proof-of-concept work programs on six of Red Metal’s exciting early-stage projects:
• Yarrie for copper-gold and copper-cobalt in Western Australia;
• Nullarbor for copper-gold and copper-nickel in Western Australia;
• Gulf for copper-gold in Queensland;
• Three Ways for zinc-lead-silver in Queensland;
• Lawn Hill for zinc-lead-silver in Queensland; and
• Mount Skipper for zinc-lead silver in Queensland.
$1.8 million upfront cash payments to Red Metal
Under the terms of the agreement OZ Minerals will make an initial cash payment to Red Metal of $1.8 million being $300,000 for each of the six nominated projects
OZ Minerals has also committed to expend a minimum amount on each project (total $8 million) within a two-year period.
After completion of the minimum expenditure commitment on a project, OZ Minerals has the option to trigger the formation of a joint venture over that project whereby it can earn 51% by spending the designated earn-in amount on exploration within the designated earn-in period.
Details minimum of commitments and earn-in requirements
OZ Minerals is widely recognized as one of Australia’s premier mining companies and has shown a strong commitment to regional exploration in Australia.
It owns the large Prominent Hill copper and gold mine in South Australia and is also developing the nearby Carrapateena copper and gold deposit.
The greenfields discovery alliance between Red Metal and OZ Minerals sets a new standard for the effective collaboration of a growth oriented major Australian mining group with an expert, ASX-listed, junior exploration company.
Exploration under the alliance will commence early in the 2019 field season with high-resolution gravity surveys on Nullarbor and Lawn Hill, followed by proof-of-concept drilling on the Mount Skipper, Gulf and Nullarbor projects.
Work programs on the exciting Yarrie and Three Ways projects are pending granting of the tenements which is expected in 2019.