Minerals explorer Alderan Resources has entered an earn-in and joint venture agreement worth up to $US30 million with Rio Tinto to explore its Frisco project in Utah.
Under the agreement, Rio’s Kennecott division will have the option to acquire up to 70 per cent interest in the Frisco project, owned by Alderan’s subsidiary Volantis Resources, by spending $US30 million (approximately $A44 million) on exploration within three years.
The minimum spending required by Kennecott is $1 million within the first 18 months.
Kennecott has the right to form a joint venture with Volantis at any time after the initial earn-in stage and will be the joint venture manager.
Alderan said the agreement would provide a significant source of funding for the company, enabling it to pursue lower cost exploration opportunities within its existing portfolio and within potential new projects.
Commenting on the agreement was Alderan managing director Peter Williams.
“Alderan is delighted to have Kennecott as a partner in the exploration of Frisco, which we see as a validation of the prospectivity of the project and a major step forward in unlocking the potential of the area,” he said.
“We look forward to sharing details as the first exploration program progresses.”
Alderan said Kennecott is required to meet all annual claim and lease fees, which will count towards its expenditure.