Rio Tinto has entered into a farm-in and joint venture agreement with gold and base metals explorer Carawine Resources.
Under the agreement, Rio Tinto will explore the Baton and Red Dog tenements, which are part of Carawine’s Paterson gold-copper and copper-cobalt project in northern Western Australia.
Under the agreement, Rio Tinto will pay Carawine $200,000 in cash within 30 days of implementing the agreement. It will also spend at least $1 million, drill at least 2000 metres within the first two years of the agreement and subscribe to $300,000 worth of Carawine shares once the two-year minimum commitment is complete.
Rio Tinto then has the right to earn a 70 per cent interest in Baton and Red Dog if it achieves 3000 metres of diamond or reverse circulation drilling and $5.5 million exploration expenditure within six years of the agreement date.
Once Rio Tinto earns 70 per cent interest, a JV will be formed.
Carawine managing director David Boyd said Rio Tinto’s commitment underlined the exciting potential of the Baton and Red Dog prospects.
“To have one of the world’s largest resources companies committing to significant expenditure on our Baton and Red Dog tenements is a strong endorsement of the prospectivity of the tenements,” Boyd said.
“Rio Tinto Explorations is actively exploring in the Paterson to complement their Winu discovery.
“They have the technical knowledge and resources to rapidly and systematically evaluate the numerous high-priority targets at Baton and Red Dog, increasing the chances of a successful discovery.
“This deal also ensures Carawine is well positioned to share in the benefit of ay discoveries, with Rio Tinto well placed to support a potential development should the exploration activities be successful.”
The agreement will add to Rio Tinto and Carawine’s existing joint ventures within the Paterson project, the Calibre and Magnum prospects.