PERTH (miningweekly.com) – Junior Sipa Resources has inked an earn-in and joint venture (JV) agreement with mining major Rio Tinto’s exploration arm, for an interest in its Kitgum Pader base metals project, in Uganda.
Under the agreement, Rio would have the option to earn an initial 51% interest in the project by spending $12-million on exploration within the first five years, including a minimum commitment of $2-million.
The company could increase its shareholding in the Kitgum Pader project to 65%, by spending an additional $15-million within a further three-year period. By spending an additional $30-million on exploration, or the delineation of a Joint Ore Reserves Committee-compliant resource containing at least 250 000 t of nickel or nickel equivalents within a further three years, Rio can take its interest to 75%.
Rio will have exclusive marketing rights to the production from the project area, with an arm’s length commission applying.
Rio was expected to contribute expertise and funding to the JV, while Sipa would continue to manage exploration activities in the initial stages of the JV, leveraging off its extensive technical and logistical experience operating in Uganda.
Sipa told shareholders on Monday that the agreement would allow the company to accelerate nickel/copper exploration activities within the broader project area, while also continuing to evaluate its Akelikongo discovery, which was emerging as one of the more significant magmatic nickel/copper discoveries made within the last few years.
“This is a company-defining transaction for Sipa which vindicates our long-term focus on pursuing opportunities to discover new world-class base metal and gold/copper deposits within emerging mineral provinces with Tier 1 potential,” said Sipa MD Lynda Burnett.
The transaction was subject to Rio completing due diligence.