TORONTO (miningweekly.com) – TSX-V-listed Tsodilo Resources has entered into a C$2.5-million private placement and strategic alliance with base metals miner First Quantum Minerals.

The private placement, which closed this week, saw First Quantum pay C$2.5-million for 2.27-million Tsodilo units, comprised of one common share priced at C$1.10 and one common share purchase warrant per unit. Each warrant entitled the holder to buy one share of the company until the close of business on April 22, 2015, at $1.21.

Tsodilo said it would use the funds raised through the financing to advance the Xaudum iron-ore and kimberlite projects in Botswana, and for general corporate working capital.

The Xaudum magnetite banded iron formation iron-ore and base metals discoveries in north-west Botswana, host Katangan-aged sedimentary rocks similar to those in the Central African copperbelt, which were previously unknown, except to locals who were using the iron-ore for the gravelling of roads.

First Quantum had also, through the transaction, acquired the right to earn up to a 70% interest in Tsodilo’s prospecting rights for base, precious and platinum-group metals and rare-earth minerals in Botswana, excluding iron-ore.

Tsodilo's chairperson and CEO James M Bruchs said First Quantum, with its extensive experience in Zambia’s copperbelt, would be best suited to explore for African copperbelt-type base metal targets in north-west Botswana that Tsodilo had identified in the past several years and which were identical in age and composition to those in the Central African copperbelt.

“These rocks are in fact the south-westerly extension of the Zambian copperbelt and clearly hold great potential for copperbelt-style targets. Having First Quantum's experienced exploration team from Zambia moving exploration on our ground forward is as good as it gets,” Bruchs said in a statement.

Under the terms of the agreement, First Quantum could earn either a 51% or a 70% participating interest in designated projects within the overall licence area held by Tsodilo subsidiary Gcwihaba Resources, by funding $6-million in exploration expenditures within the project area within the first two years after signing a definitive earn-in option agreement; funding $9-million more in exploration expenditures within the project area by the end of the fourth year; and through completing a National Instrument 43-101-compliant technical report on a designated area within the project area.

After satisfying the earn-in requirements, First Quantum could then maintain the earn-in option for up to an additional three years by spending a minimum of $2-million a year on exploration and evaluation studies on the project area.

Should a significant project crystallise from this agreement, a joint venture would be formed to develop the project, with First Quantum responsible for all costs.

Tsodilo’s TSX-V-listed shares on Friday traded C$0.88 apiece.