Midwinter Resources, an Australian mining company, has entered into an agreement with Southern Hemisphere Mining to acquire a 65% stake in the Mantos Grandes project located in Chile during the June quarter 2013.
The project features copper mineralization with gold and silver credits as well as a 200 ton per day mill and copper flotation plant.
Southern Hemisphere will retain 35% stake in the project.
The agreement that is subject to due diligence and shareholder approval will be followed by farm-in agreement, during the execution of which, Midwinter will make a payment of $350,000 to Southern Hemisphere.
Midwinter is also mandated to fund $400,000 of project expenditures within 6 months of the execution of the farm-in agreement and an additional investment of $600,000 will be made in case the company opts to proceed with the agreement. A similar expenditure cost will be levied by Midwinter to proceed further within next six months.
The Australian miner would make a final payment of $1m to Southern Hemisphere in immediately available funds, the company stated.
Midwinter, meanwhile, retains a 70% stake in prospecting rights for iron ore in the Limpopo Province, South Africa and the company has not conducted any field work on these licenses during the quarter.
Also, the company leveraged the option to apply for prospecting rights over areas of known phosphate mineralization in the South Africa. Further, Midwinter has applied for four exploration licenses in Western Australia over prospective phosphate occurrences.