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- An equity investment company of Agrimin (AMN) has signed a farm-in and joint venture agreement with a Rio Tinto (RIO) subsidiary
- Under the agreement, Rio Tinto Exploration can earn a JV interest in five Western Australian tenements held by Tali Resources
- Tali and Rio Tinto will finalise a 2021 exploration plan for the tenements in the coming weeks
- Agrimin is down 4.39 per cent and trading at 54 cents per share
- Rio Tinto is up 1.05 per cent and trading at $6.92 per share
An equity investment company of Agrimin (AMN) has signed a farm-in and joint venture agreement with a Rio Tinto (RIO) subsidiary.
The equity investment company, Tali Resources, is 40 per cent owned by Agrimin. The private company has executed an agreement with Rio Tinto Exploration.
Under the agreement, Rio Tinto Exploration can earn a JV interest in five tenements held by Tali. The tenements are located in Western Australia’s West Arunta region, where Tali has conducted exploration for precious and base metal deposits.
Under stage one of the agreement, Rio Tinto Exploration can earn a 51 per cent JV interest in the tenements by solely funding exploration expenditure of $3 million. The mining subsidiary would also have to complete a minimum of 3,000 metres of diamond and/or RC drilling within the first three years.
If Rio Tinto Exploration satisfies stage one, the company has the opportunity to increase its JV interest in the tenements to 65 per cent. This can be achieved by solely funding exploration expenditure of a further $5.5 million, and completing a total of 7,000 metres of diamond and/or RC drilling within the next four years.
If Tali does not choose to contribute to exploration expenditure in proportion to its JV interest after stage two, Rio Tinto Exploration has the opportunity to increase its own interest in the tenements to 75 per cent.
This can be achieved by solely funding JV expenditure to either a) the definition of a measured and indicated mineral resource with an in-situ value of at least $2 billion, or b) completion of an order of magnitude study that includes the definition of a mineral resource with an in-situ value of at least $500 million, or c) exploration expenditure of a further $50 million, whichever comes first.
The agreement does not involve any of Agrimin’s tenements, nor does it cover any areas associated with the company’s Mackay Potash Project. Agrimin’s CEO, Mark Savich, commented on Tali Resources’ agreement with Rio Tinto Exploration.
“It is pleasing to see a major mining company such as Rio Tinto commit to exploring on Kiwirrkurra lands within the West Arunta region through its farm-in agreement with Tali,” he said.
“We look forward to the commencement of their exploration as well as the prospect of new opportunities being created for the Kiwirrkurra community,” he added.
Despite Mark’s comments, native title consent to the agreement has not yet been provided. If consent from the relevant native title holders is not obtained within 60 days of the agreement’s execution date, Rio Tinto Exploration may terminate the agreement.
That said, Tali Resources and Rio Tinto Exploration will finalise a 2021 exploration plan for the tenements in the coming weeks.
Agrimin is down 4.39 per cent, trading at 54 cents per share at 1:28 pm AEDT.
Rio Tinto is up 1.05 per cent, trading at $6.92 per share at 2:04 pm AEDT.
