Rio Tinto Exploration signed a binding term sheet with Trek Metals for an option to farm-in over the latter’s Jimblebar nickel-copper project in the Pilbara region of Western Australia.
Under the terms of the agreement, the fully owned subsidiary of Rio Tinto will make an upfront payment of A$50,000 ($33,451.25) to the mineral explorer for an exclusive initial six-month option to explore the Jimblebar project
Located 40km southeast of Newman, the nickel-copper project contains the exploration licences E52/3605, E52/3672, E52/3983 and E52/4051.
According to Trek Metals, the Jimblebar project is highly prospective for magmatic nickel-copper sulphide mineralisation and contains the western arm of the Jimblebar greenstone belt.
Rio Tinto Exploration is expected to commit to spending a minimum of A$100,000 ($66,902.5) on the tenements of the nickel-copper project during the option period.
Besides, the mining company will have the right to extend the option term to 12 months by paying an additional A$25,000 ($16725.63) to Trek Metals.
Furthermore, Rio Tinto Exploration can choose to farm-in to the Jimblebar project to earn an 80% joint venture (JV) interest at any time during the option period.
This can be done by solely funding exploration expenditure of A$5m ($3.35m) on the tenements of the nickel-copper project.
Once the company earns 80% JV interest, it will finance Trek Metals’ share of the JV expenditure until the earlier of ‘an order of magnitude’ study has been completed and the cumulative sole-funded expenditure of A$40m ($26.7m).
Trek Metals CEO Derek Marshall said: “We are delighted to be partnering with Rio Tinto Exploration (RTX) to advance the exploration for magmatic nickel-copper at Jimblebar, which is located in the Tier-1 Pilbara mining district of Western Australia.
“RTX brings significant technical and operational expertise to the table, and we are very excited to be able to collaborate with their team to generate, refine and test targets across the tenements.”
