PERTH (miningweekly.com) – Dual listed uranium developer Laramide Resources will spend A$450 000 to purchase the Murphy uranium tenements, in the Northern Territory, from major Rio Tinto’s exploration arm.

The purchase agreement replaces an existing farm-in and joint venture agreement between the two companies.

Under the terms of the agreement, Laramide will pay A$150 000 within 25 business days of closing the transaction, with a further A$150 000 payment due on or before 12 months from the closing date.

A further payment of A$150 000 is due on or before 24 months from the closing date.

Laramide could elect to make the payments in either cash or common shares at the company’s discretion. Should the common share option be selected, the shares will be issued at a price which is at a discount of 10% of the value of the weighted average price of the common shares on the TSX, over the ten days prior to the date of issue.

The agreement also allows for Rio Tinto Exploration to have clawback rights, a production payment, a net smelter royalty, and rights of first refusal under certain conditions.

The clawback right can be exercised on a one-time basis, if Laramide discovers and develops a measured and indicated resource with an in-situ value of more than $1-billion. This would allow Rio to claw back a 51% interest in the project on payment to Laramide of two times their expenditure to that date.

Unless the clawback right is waived, Laramide will also be obligated to make a one-off payment equal to 1% of the preproduction expenditure on the project from first revenues, and also reserves a net smelter royalty return of 2% on all product produced from within the project area.

The Murphy project comprises two exploration licences and several associated exploration licence applications within the Murphy uranium province. The 683.5 km² of granted exploration tenure is contiguous and along strike from Laramide’s Westmoreland project.