The Solwezi Licences are comprised of two individual exploration licences totalling 506km2
Anglo-Australian mining firm Rio Tinto has signed an earn-in and joint venture agreement with Midnight Sun Mining for the Solwezi licences in Zambia.
Under the terms of the agreement, Rio Tinto has agreed to buy up to 75% stake in the Solwezi licences for $51m.
The Solwezi licences comprise two individual exploration licences. Totalling 506km2, the two licences are located in Zambia’s north-western province, adjacent to First Quantum’s Kansanshi mine.
Midnight Sun Mining acting CEO Al Fabbro said: “I am excited to be partnering with one of the preeminent leaders in the mining industry.
“Rio Tinto’s enthusiasm towards the Solwezi Licences reflects my own. Their expertise combined with their aggressive exploration plans are precisely what I want to see for this project.”
Rio Tinto to make initial cash payment of $700,000 to Midnight Sun
As per the earn-in agreement, Rio Tinto will make an initial cash payment of $700,000 to Midnight Sun, and also fund an initial work programme on the Solwezi licences.
Additionally, Rio Tinto will spend $3m, including $2m is a firm commitment, within the next two field seasons.
Upon completion of the firm commitment, the firm will pay further $300,000 to Midnight Sun.
Rio Tinto will have an option to earn 51% ownership interest in the Solwezi licences on completion of the initial work programme and by spending a further $16m in work expenditures in four years.
Additionally, the spending includes a total of $1m in additional scheduled cash payments to Midnight Sun.
The company will have the option to earn a further 14% in the licences by spending an additional $14m in work expenditures or completing a feasibility study within three years of starting stage 2.
It will also have to make an additional $1m payment to Midnight Sun.
In March 2020, Rio Tinto said it has suspended operations at the Kennecott mine located near Salt Lake City (SLC), Utah in the US as a result of a 5.7-magnitude earthquake.