Alderan Resources has executed an earn-in and joint venture (JV) agreement with Rio Tinto subsidiary Kennecott Exploration at the Frisco project in the United States.
The agreement will allow Alderan, through its wholly owned subsidiary Volantis Resources, to pursue lower cost exploration opportunities within its existing portfolio and potentially new projects.
Frisco is within the historic Great Basin mining district and is the southernmost of three sub-parallel polymetallic mineral belts in the area, containing mineralisation including gold, silver, copper and zinc.
Under the earn-in agreement, Kennecott has the option to sole fund a three-stage earn in totalling $US30 million ($44 million) either by a one to four-year option, acquiring 55 per cent undivided interest by incurring $US6 million of expenditure within four years. If it achieves this, Kennecott will acquire an additional 10 per cent undivided interest by incurring an additional $US9 million in three years.
If Kennecott achieves both of these options, it has the further opportunity to earn an additional five per cent undivided interest, a total of 70 per cent, by spending an additional US$15 million in another three years.
Kennecott may form a JV at any time after acquiring 55 per cent undivided interest. It would be the manager of the JV and form a committee with two members from Kennecott and Volantis.
Alderan managing director Peter Williams said Kennecott’s commitment endorses Frisco’s potential and enables further exploration of other projects in the area.
“Alderan is delighted to have Kennecott as a partner in the exploration of Frisco,” Williams said.
“We see this as a validation of the prospect of the project and a major step forward in unlocking the potential of the area.”
Now it has Kennecott’s support, Alderan will focus future exploration on its White Mountain and Star Range projects, while also considering additions to its portfolio.