Australian copper explorer GBM Resources has signed an agreement with Tokyo-based Pan Pacific Copper, the world’s largest buyer of copper concentrate.
The deal could see Pan Pacific spend up to $55 million on the development of new copper-gold exploration and mining projects in northwest Queensland.
GBM Resources today announced the signing a non-binding letter of intent (LOI) with the Japanese company, aiming to complete a binding agreement by 31 January 2010.
“The terms of the agreement are a win for both parties, whereby the strategic objectives for both will be met if it leads to a world class copper-gold discovery,” GBM managing director Peter Thompson said.
According to the terms of the deal, Pan Pacific will earn a 51% interest in seven exploration permits and nine exploration permit applications in GBM’s tenements in the Mount Isa region by spending $15 million within the first six years.
After earning its initial 51%, Pan Pacific will then be entitled to increase its share of the venture to 90% by spending a further $40 million on exploration and development of the tenements over the following five years, GBM said.
“This is shaping up to be a very important agreement for GBM, which will enable us to fast track exploration of some highly prospective projects and potentially generate significant rewards for our shareholders,” Thompson said.