South32 and AusQuest have formed an alliance to develop exploration opportunities in Australia and internationally.
The agreement outlines that AusQuest will use its experience in targeting new deposits and mineral provinces with ore potential to develop exploration opportunities exclusively for South32 until the end of 2019.
AusQuest will target copper, zinc and nickel, with possible associated gold, silver and lead credits, in Australia, Peru and other agreed jurisdictions.
The alliance involves several financial terms and conditions that will be applied during the exploration process, including those opportunities accepted by South32 will entitle AusQuest to a minimum payment of $US250,000 ($326,111) to advance them to a drill-ready stage.
Once the projects reach a drill-ready stage joint ventures will be formed and South32 can earn a 70 per cent interest in each prospect for $US4 million.
AusQuest managing director Graeme Drew said it was a unique opportunity for the company to work alongside South32.
“The agreement is structured to give AusQuest the financial capability to identify and evaluate opportunities as well as rewarding the company for success along the way,” Drew said.
“The immediate injection of exploration funds across a number of projects in our portfolio will allow us to get on with the job of generating and evaluating prospects, advancing them to a drill-ready status which is where the real value will be.”
South32 is already interested in five of AusQuest’s projects, including the Blue Billy project in Western Australia.