The miner’s subsidiary signed a deal to earn an 80% interest in one of the three exploration licenses that make up the copper project
Renascor Resources has signed a binding farm-in and joint venture agreement with Rio Tinto Exploration pertaining to the EL 5586 license, which is part of its Marree copper project in Australia.
The Marree project, which also includes the EL 6170 and EL 6403 exploration licenses, is located in the Adelaide Fold Belt in South Australia.
Renascor Resources will retain 100% interest in the EL 6170 and EL 6403 licenses.
The Australia-based company claims to have identified the potential for large tonnage Zambian Copper Belt-style, sedimentary deposits at the Marree copper project.
Renascor Resources managing director David Christensen said: “We are delighted that Rio Tinto Exploration has agreed to commit its considerable resources and expertise toward exploring EL 5586 and that Renascor shareholders will have an opportunity to benefit from the discovery potential of this highly prospective, but underexplored exploration prospect.
“This agreement is consistent with Renascor’s strategy of maximising the value of our significant pipeline of exploration projects in South Australia, while dedicating our resources towards advancing core projects with near-term potential to offer significant value uplift.”
Details of the farm-in deal for the Marree copper project license
As per the terms of the deal, Rio Tinto Exploration could earn an interest of 80% in EL 5586 through staged payments to Renascor Resources of AUD200,000 ($142,520) over a two-year period.
Subject to its decision on continuing exploration, the Rio Tinto subsidiary will be responsible for covering the funding for exploration on EL 5586 of AUD3m ($2.14m) within five years of the date of the farm-in deal.
The exploration programmes in the particular Marree copper project license will be managed by Rio Tinto Exploration. Besides, the company will be responsible for maintaining statutory expenditures throughout the earn-in period.
A joint venture will be created between the two parties should the Rio Tinto subsidiary fulfil the earn-in requirements.
The parties will have the right to dilute their respective stakes, and if either of their interest drops under 5%, the interest will be converted to a 1.25% net smelter royalty on the first 12 years of production from the Marree copper project license.