PERTH (miningweekly.com) – Junior explorer Monax Mining and its alliance partner Chilean copper producer Antofagasta have banded together to establish a designated project, dubbed Musgrave, in South Australia.
Monax on Friday reported that its subsidiary Monax Alliance had signed a memorandum of understanding (MoU) with Rasp Resources and Musgrave Mining over three tenements in South Australia.
Under the MoU, Alliance could earn an initial 51% interest in the tenements by spending $4-million within a three-year period, after the grant of the first tenement.
Upon earning a majority shareholding, Alliance had the right to earn a further 29% interest in the project area by spending a further $5-million over four years.
Upon reaching the 80% shareholding mark, Alliance and the two firms would form a joint venture, where each company would fund exploration on a pro-rata basis, or if Musgrave and Rasp elected not to contribute, Alliance could purchase the individual tenements for $10-million each, payable on a decision to mine.
Under the 2011 alliance agreement between Monax and Antofagasta, the Chilean miner committed $1-million to Alliance over two years, for target generation within South Australia.
In September last year, Antofagasta agreed to extend the alliance for an additional 12 months by spending up to $400 000.
Properties identified as ‘projects of interest’ become designated projects under the alliance agreement, and once a designated project is formed, Antofagasta would have acquired a 51% interest in the project, with Monax retaining a 49% share.
Antofagasta would then have the option to earn an additional 19% shareholding in the designated project by spending a further $4-million within three years, after which both parties would have the right to maintain their interest by contributing to exploration or development cost on a pro-rata basis.
The Musgrave project was the second dedicated project between Monax and Antofagasta, with the first being the Millers Creek project.