OZ Minerals and Red Metal have formed a joint venture agreement aimed at fast tracking the search for greenfields discoveries at projects in Western Australia and Queensland.
The greenfields discovery alliance provides OZ Minerals with a two-year option to fund a series of mutually agreed, proof of concept work programs on six of Red Metal’s early stage projects.
In Western Australia, the companies will explore for copper-gold and copper-cobalt prospects at the Yarrie project, and for copper-gold and copper-nickel prospects at the Nullabor project.
The JV will target four opportunities in Queensland, including copper-gold at the Gulf project, zinc-lead-silver at the Three Ways project, zinc-lead-silver at the Lawn Hill project, and zinc-lead-silver at the Mount Skipper project.
OZ Minerals has committed to spend a minimum amount on each project within the two-year period, with the total commitment to be $8.05 million.
After reaching the minimum spend, OZ Minerals has the option to form a joint venture at any particular project and can earn 51 per cent by spending an earn-in amount during a certain period.
Once OZ Minerals has earned 51 per cent of a particular project, Red Metal can decide to contribute pro-rata to future exploration and development costs to retain its 49 per cent interest, or elect not to contribute and have its stake reduced to 30 per cent.
Red Metal’s board believes the alliance with OZ Minerals “sets a new standard for the effective collaboration of a growth oriented major Australian mining group with an expert, ASX-listed, junior exploration company well recognised for its ability to generate promising greenfields initiatives.”
The alliance will launch exploration early in 2019 at the Nullabor and Lawn Hill projects.