PERTH (miningweekly.com) – Copper miner Oz Minerals has inked a heads of agreement with fellow-listed Minotaur Exploration to make good on its promise to accelerate the search for brownfield copper resources in South Australia.

The arrangement would allow Minotaur unfettered access to Oz Minerals’ database over the Mt Woods project area, which the explorer would use to try to identify new mineral discovery opportunities.

Oz Minerals would reimburse Minotaur for up to 80% of its time costs on the research work, which was expected to take several months.

Once the companies collectively agreed on the merits of a particular target, an on-ground assessment would be done. The companies would jointly contribute A$3-million in funding to allow for initial “trothing” of the identified prospects, with Minotaur acting as operator.

Following the “proof of concept” phase, a joint venture (JV) would be formed in which Oz Minerals would hold an 80% share and Minotaur 20%. Minotaur could elect to sole-fund an initial A$2-million exploration spend to earn an additional 10% interest in the JV or could maintain its interest by contributing on a pro rata basis.

Where Oz Minerals declined to take a prospect into the “proof of concept” phase, Minotaur could elect to sole-fund A$2-million of exploration work to earn an 80% share in the project area, following which the parties would contribute on a pro rata basis.

If the Minotaur-funded prospect should reveal a Joint Ore Reserves Committee-compliant resource of at least 200 000 t of contained copper-equivalent metal, Oz Minerals would retain the option to buy back the majority interest in the project area by paying Minotaur a multiple of three of its exploration expenditure. If the buy-back option was exercised, Oz Minerals would return to an 80% shareholding in the project area, while Minotaur would maintain a 20% interest.

Oz Minerals CEO and MD Andrew Cole said on Tuesday that the agreement with Minotaur reinforced the company’s commitment to increasing future copper production in line with its growth strategy.

“We’ll be giving Minotaur access to our exploration data and, in return, will receive their proven expertise in exploration and analysis, increasing the possibility of making significant new discoveries.

“This project allows Oz Minerals to leverage Minotaur’s excellent reputation as a successful explorer, leaving Oz Minerals to focus on fast-tracking the Carrapateena high-grade resource option, expanding the Prominent Hill underground mine and seeking growth opportunities elsewhere.”

Minotaur MD Andrew Woskett said the agreement with Oz Minerals was of significant strategic value to the company, complementing Oz Minerals’ third position on Minotaur’s shareholder register.

“It is entirely consistent with Minotaur’s drive to cement JV alliances with highly credentialed industry participants, sharing exploration risk and costs.”