OZ Minerals has agreed to ‘loan carry’ Minotaur Exploration’s Jericho copper project through to the start of commercial production in exchange for an increased stake in a joint venture.
The company’s increased share applies to the newer of two JVs between the companies, the Jericho JV, which came about as part of a restructure of the agreement between the two companies.
OZ Minerals’ stake in the Queensland-based Jericho JV has risen from 70 per cent to 80 per cent as a result of the loan carry agreement. Minotaur has partnered with OZ Minerals on the larger Eloise JV project since April 2018.
The Eloise JV encompasses the tenement area in which the Jericho deposit is located, but the companies decided to enter into a smaller JV exclusively focused on Jericho earlier this year.
Minotaur will be relieved of financial pressure with the loan carry deal (including the requirement for dilutive capital raising) as it works on development of the Jericho site towards its project start date.
Sole funder OZ Minerals gained 70 per cent of the Eloise JV at the end of March by fulfilling its $10 million spending commitment with Minotaur, which acts as the project’s manager and operator.
The two companies have performed extensive drilling of the project area, working collaboratively towards defining Jericho’s maiden JORC resource.
Minotaur managing director Andrew Woskett said the loan carry arrangement was a highly attractive route for the company.
“This new joint venture underscores the strong relationship created between the two companies in pursuit of base metal discoveries since 2016,” he said.
“OZ Minerals has a demonstrated track record in both developing and executing large underground copper mines and has a proven inclination to progress attractive projects aggressively.”
OZ Minerals also has a 70 per cent JV interest with Cassini Resources at the West Musgrave nickel-copper project in Western Australia, which has been referred to as Australia’s largest undeveloped copper-nickel deposit.
The company spent a total of $36 million to secure the stake in Cassini’s project in April. It had previously spent $22 million of the $36 million to secure 51 per cent by October 2018.