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Resolution signs farm-in agreement with OZ Minerals

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Global Mining Review,

Resolution Minerals Ltd (RML), through its wholly owned subsidiary, Xavier Resources Pty Ltd, has entered into a binding Heads of Agreement – farm-in and joint venture (JV) – Benmara Project with OZ Exploration Pty Ltd (OZE), a wholly owned subsidiary of OZ Minerals Ltd (OZL).

Resolution signs farm-in agreement with OZ Minerals

Under the agreement, OZL can earn from Xavier up to a 75% legal and beneficial interest in the mineral exploration tenements, EL31287, EL32228, EL32229, EL32849, EL32850, EL32883, and EL33059 (Benmara Project), in the Northern Territory.

To earn a 51% interest in the Benmara Project OZL is required to undertake exploration activities of $1 million over an initial 2-year period (minimum commitment) a further $3 million expenditure over a 3-year period (Stage 1), which includes a $250 000 reimbursement for the Cedar tenements acquisition costs. A formal joint venture agreement (in line with industry standard terms) may be formed from the point that OZL earns a 51% interest in the project.

If OZL does not spend $4 million within the 5-year period (towards the end of Stage 1), Resolution retains a 100% interest. Resolution can elect to contribute at 49% interest (initial JV formed) or 25% interest following Positive Financial Investment Decision (PFID). If OZL elects to discontinue sole funding after having reached a 51% interest, OZL transfers 2% interest to RML for $1, and RML becomes the 51% owner and manager with OZL diluting.

To earn a 75% interest in the Benmara Project, OZL must expend at least $1 million per year over a further 5-year period to PFID. If either party’s interest dilutes to below 10% that party’s interest converts to a 2% NSR. OZL can accelerate earning to any milestone by meeting the expenditure requirements early.

Overspend in any stage is carried forward to the next stage.

Christine Lawley, CEO, comments:

“We are very pleased to announce this new exploration funding agreement with copper focussed producer OZ Minerals for the Benmara Project in the underexplored South Nicholson Basin, Northern Territory.

“The new farm-in and JV agreement with OZ Minerals, is validation of Resolution’s exploration strategy, which identified the potential for large scale base metal deposits analogous to the world-class McArthur River Mine in this under-explored region during the 2021 field season.

“In particular the results of our 2021 RC drilling program and air-borne VTEM geophysics survey, identified large scale untested conductors and thick packages of up to 200 m thick reductive shale units. These results proved the Benmara Project has a geological setting equivalent to other regional deposits such as the McArthur River Mine, Walford Creek, and the Century Mine.

“This development should excite Resolution’s shareholders. The agreement makes it possible for Resolution to advance three major projects simultaneously; two having external funding from copper producer OZ Minerals at both Wollogorang & Benmara Projects. This minimises dilution for Resolution shareholders and creates three major opportunities for shareholder upside.

“While all eyes will be on drilling activities in June on our flagship 64North Gold Project in Alaska, do not underestimate the value creation being undertaken in Australia with significant drilling activities planned closer to home on our Northern Territory Projects in 2022.”

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Australian mining news Copper mining news