Under the agreement, Rio Tinto is allowed to acquire up to a 75% interest in Arcas Project, by spending up to $25m (£17M) towards exploration
Canadian mineral exploration company Aethon Minerals, along with its wholly-owned Chilean subsidiary, have announced the execution of an earn-in with option to joint venture agreement with Rio Tinto Mining and Exploration/Agencia En Chile, to acquire stake in its Arcas project in Chile.
The Arcas Project is located 245 km northeast of Antofagasta city, in Chile, and the project region is situated in the Atacama Desert, the cordilleran transitional zone between lower desert and high cordillera, at elevations ranging between 1,500-3,800m.
Under the agreement, Rio Tinto is allowed to acquire up to a 75% interest in Arcas Project, by spending up to $25m (£17M) towards exploration.
Aethon Minerals Interim CEO John Miniotis said: “We are delighted to secure a significant exploration agreement on the Arcas Project with one of the world’s largest and most successful mining and exploration companies. Rio Tinto’s tremendous technical and financial depth will greatly enhance the prospects of successfully uncovering a major copper discovery at Arcas.”
“We believe this transaction represents a strong endorsement of the exploration potential at Arcas, and we look forward to working closely with the Rio Tinto team as we aim to unlock value for all shareholders.”
Details of the earn-in with option to joint venture agreement with Rio Tinto Mining
Under the first option, Rio Tinto is allowed to acquire a 51% stake in the a new company (Opco) that will be incorporated, by spending a total expenditure of $4m (£3m) in 3 years, and make an aggregate cash payment of $300,000 (£243490) to Aethon in first two years.
Under the second option, Rio Tinto’s total interest will be increased to 65%, following the additional project expenditure of $5m (£4m) over the subsequent 2 year period.
Pursuant to the third option, Rio Tinto will be provided with additional 10% interest in Opco, following investment of additional $16m (£13m) as project expenditure over the subsequent 3 year period.