Rio signs farm-in option with Twenty Seven Co

ASX-listed Twenty Seven Co has entered an agreement with mega-miner Rio Tinto’s exploration arm, Rio Tinto Exploration, or “RTX”.  RTX has negotiated a six month exclusive option period to explore for non-gold minerals at Twenty Seven Co’s North Rover project near Sandstone in WA. RTX can earn an 80 per cent interest in non-gold minerals at the tenement by spending $5 million on it.

Twenty Seven Co’s North Rover Project covers an exploration licence located in the central Yilgarn region of WA some 30-50 kilometres southeast of Sandstone. Historically the area is somewhat underexplored albeit it is undergoing a resurgence in exploration.

Twenty Seven Co and RTX have signed a binding term sheet that will see the latter company pay Twenty Seven Co $25,000 to initiate an exclusive six month option to explore. The agreement allows for an additional six month period where “circumstances beyond the control of RTX result in delays to RTX’ activities.” If an extension period is triggered, RTX will be required to pay another $25,000 to Twenty Seven Co. 

During the option period, RTX can precipitate a farm-in agreement giving it the right to earn the 80 per cent interest at North Rover after spending the agreed $5 million on exploration. To earn the 80 per cent joint venture interest RTX must conduct a minimum of 500 metres of drilling in the first two years and spend at least $200,000 on exploration for every year the farm-in is active. Twenty Seven Co retain all rights to gold at North Rover.

North Rover is a wholly owned gold and base metals project covering 460 square kilometres of tenure across three exploration licenses The agreement covers exploration license E57/1134 however does not include Twenty Seven Co’s other exploration licenses, E57/1085 and E57/1120. It is comprised of two linear Archean greenstone belts with a combined length of approximately 160km and the company said greenstone belts in the region are endowed with considerable gold and base metals deposits. Twenty Seven Co is waiting for final multi element and 1m gold results before designing the next phase of exploration at North Rover.

Commenting on the option agreement, Twenty Seven Co. Chief Executive Simon Phillips said, “We are delighted to be partnering with Rio Tinto Exploration to advance exploration for non-gold minerals within the northern part of our Rover. RTX brings to the table a successful exploration track record and deep technical experience. The Yilgarn region is currently undergoing an exploration resurgence and the fact that we have attracted a global miner such as Rio Tinto demonstrates the underlying potential of our tenements. We look forward to providing updates on exploration progress in due course.”

What Rio Tinto Exploration knows that has led to this option agreement will no doubt be the subject of speculation. With gold not part of the agreement the region’s rich greenstone hosted nickel-copper sulphides may be the target, or perhaps RTX has something else up its sleeve. One thing however is certain – if there is anything there Rio Tinto can afford to find it and Twenty Seven Co can simply enjoy the ride on the back of its coat tails.  

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au