South32 takes steps into Peru
PERTH (miningweekly.com) – Diversified miner South32 has signed an earn-in agreement with ASX-listed junior Inca Minerals over its Greater Riqueza project, in Peru.
Under the terms of the option agreement, South32 will provide $275 000 to fund an aeromagnetic, radiometric and digital terrain model survey over the entire project area.
In exchange, South32 will be granted an exclusive option to earn-in and acquire majority ownership of the multi metals project. The option could be exercised within 30 days after South32 receiving the results from the survey.
The two companies are then expected to negotiate an earn-in agreement on terms that have been agreed upon in advance, within a period of 90 days. This period can be extended by mutual agreement, or South32 can request a two-year exclusive option period.
Once South32 has exercised its option over the Greater Riqueza project, the company can earn a 60% interest by funding all agreed-upon expenditure at the project.
At the start of the earn-in, all of the project tenements will be transferred into a newly incorporated Peruvian company, and on completion of the Phase 1 funding obligations, Inca and South32 will enter into a shareholder agreement that will see South32 acquire a 60% equity interest in the project company.
South32 could then elect to acquire an additional 10% interest in the project company in exchange for funding all project expenditure needed to conduct and complete a prefeasibility study.
Inca will remain the operator of the project until after the completion of the first earn-in period, and once South32 elects to assume operatorship.
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