Gold and base metals explorer Carawine Resources Limited (ASX:CWX) has entered into a Farm-In and Joint Venture Agreement with Rio Tinto Exploration Pty Limited (RTX) to explore the Baton and Red Dog Tenements in Western Australia.
Carawine Managing Director David Boyd said the tenements are part of the company’s Paterson Project where 20 high-priority target areas covering a range of potential deposit types have been identified so far.
Mr Boyd said attracting Rio Tinto to Farm-In underlined the exciting potential of the Red Dog and Baton prospects.
“To have one of the world’s largest resources companies committing to significant expenditure on our Baton and Red Dog tenements is a strong endorsement of the prospectivity of the Tenements,” Mr Boyd said.
“RTX is actively exploring in the Paterson to complement their Winu discovery. They have the technical knowledge and resources to rapidly and systematically evaluate the numerous high priority targets at Baton and Red Dog, increasing the chances of a successful discovery.
“This deal also ensures Carawine is well positioned to share in the benefit of any discoveries, with Rio Tinto well placed to support a potential development should the exploration activities be successful. We look forward to sharing the details of the exploration programmes as they progress.”
Key terms of the Agreement are:
- RTX will pay Carawine A$200,000 in cash within 30 days of execution of the Agreement
- RTX must complete the following within the first two years of the Agreement (the “Minimum Commitment”):
- exploration expenditure of at least A$1 million, and
- at least 2,000m of diamond and/or RC drilling
- At the completion of the minimum commitment, RTX will subscribe to A$300,000 worth of Carawine shares. RTX must complete the Minimum Commitment and the Share Subscription before it can withdraw from the Agreement.
- RTX then has the right to earn a 70% interest in the Tenements by completing the following within six years of the Agreement date:
- 3,000m of diamond or RC drilling, and
- exploration expenditure of A$5.5million, both inclusive of the Minimum Commitment.
- Once RTX has earned a 70% interest in the Tenements, a Joint Venture will be formed.
- Following the formation of the Joint Venture, RTX have the right to earn an additional 10% interest in the Tenements by sole funding Joint Venture expenditure up until the earlier of:
- definition of total Mineral Resources on the Tenements containing material with an in-situ (in-ground) value equivalent to at least A$1 billion; or,
- completion of a scoping-level study in respect of any mineral deposit discovered on the Tenements.
Mr Boyd said Carawine’s tenement holding in the Paterson region has recently increased, with the company being successful in four ballots for competing tenement applications.
These include a large tenement immediately south and adjoining the Baton tenements, as well as tenements which extend to within 1km of Metals X’s Nifty Copper operation.