JOHANNESBURG (miningweekly.com) – Australian exploration company Eclipse Metals and its wholly-owned subsidiary, North Minerals, has entered a joint venture (JV) agreement with mining giant Rio Tinto subsidiary Rio Tinto Exploration to acquire an interest in one of the company’s Northern Territory Liverpool uranium project tenements, in the Alligator Rivers uranium fields.

The agreement provides Rio Tinto with the right of first refusal over the company’s other tenements in the Northern Territory. Under the agreement, Rio Tinto also has the right to farm into exploration licence application 27584, containing the Devil’s Elbow prospect.

The company can earn up to a 90% interest by incurring expenditure in stages from the date of executing the agreement, including spending a minimum of $250 000 on exploration and separately funding costs associated with achieving land access through the Northern Land Council and tenement grant.

In Stage 1, Rio Tinto will complete a $1.5-million sole-funded exploration within three years to earn an initial 65% JV interest. Stage 2 will see the miner opting to elect to earn a 75% JV interest by spending an additional $2-million over a further three-year period.

At the end of Stage 2, Eclipse may elect to contribute pro rata to expenditure and maintain a 25% JV interest.

In the event that Eclipse elects not to contribute, then Rio Tinto will proceed to Stage 3, electing to sole fund a further  $1.5-million expenditure over two years, to a 90% JV interest.

Upon Rio Tinto earning a 90% interest, Eclipse may elect to maintain a contributing 10% interest or sell its interest to Rio Tinto at fair market value.

Eclipse chairperson Carl Popal noted on Monday that the arrangement was a strong vindication of the company’s belief in the prospectively of the project. “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.

“We believe this arrangement significantly enhances the prospects of identifying and developing economically viable mineral deposits at Liverpool,” he added.