Rio Tinto will fund up to AUD5 million ($3.8 million) in exploration expenditure to earn a 90% stake in one of Eclipse Metals' uranium projects in Australia's Northern Territory. It will also have right of first refusal over various other Eclipse uranium tenements in the state.
Under the terms of a farm-in/joint venture agreement signed on 19 August, Rio Tinto has agreed to spend at least AUD250,000 on exploration of Eclipse's Devil's Elbow tenement, one of its Liverpool Uranium Project tenements. It will also fund costs associated with gaining land access to the tenement through the Northern Land Council and tenement grant.
Once Rio Tinto has spent AUD1.5 million on exploration within three years, it will earn an initial 65% joint venture interest in the Devil's Elbow tenement. It may then raise its stake to 75% in the joint venture by spending an additional AUD2 million over a further three-year period.
Rio Tinto may then opt to fund a further AUD1.5 million in exploration over two years to earn a 90% joint venture interest. At that point, Eclipse can either maintain its 10% interest or sell it to Rio Tinto at fair market value.
Eclipse's Liverpool Uranium Project tenements are situated in the Alligator Rivers uranium field in Northern Territory. The Devil's Elbow prospect is situated 24 kilometres from Cameco's Caramel Uranium resource and 41km southeast of the former Nabarlek uranium mine.
Eclipse executive chairman Carl Popal said, "The arrangements with Rio Tinto will mean that standout exploration targets will be given first-class technical assessment by one of the world's largest and most successful mining and exploration companies." He added, "We continue to seek the best results for the Eclipse shareholders and believe that this farm-in and joint venture arrangement significantly enhances the prospects of identifying and developing economically viable mineral deposits at the Liverpool Project."
Popal said the agreement with Rio Tinto also contains a right of first refusal over various Eclipse uranium tenements in Northern Territory "which have been identified as being of interest".
Researched and written
by World Nuclear News