PERTH (miningweekly.com) – ASX-listed junior Regal Resources has inked an agreement with Canada’s Ivanhoe Mines to acquire a 98% interest in a number of exploration permits in the western Katanga Copperbelt, in the Democratic Republic of Congo (DRC).
Regal could earn an initial 80% interest in the five permits by spending an initial $3-million on exploration, within three years. The company could increase its shareholding to 90% by spending a further $3-million on the project areas in the following two years.
Regal would also retain an option to acquire a further 8% shareholding, at an agreed price.
Furthermore, the company would be required to pay an initial $100 000 signing fee, and a subsequent nonrefundable signing fee of $150 000 on the first anniversary of the signing of an agreement.
Regal MD David Young said on Thursday that the Ivanhoe permits had "excellent" potential for significant economic discoveries, and further strengthened the company’s position in the largest and most prolifically mineralised sediment-hosted copper province in the world.
“It is also another demonstration of our commitment to develop the minerals potential of the region,” Young said.
He added that Regal would benefit from the work already completed by Ivanhoe over parts of the permits, which would allow the company to take a focused approach to the exploration.
“Exploration costs should be reduced as Regal is already well established in the region and working with a team of geologists with excellent local knowledge of both the terrain and the geology,” Young said.
The proposed joint venture (JV) area covers some 400 km2.
Ivanhoe had the right to claw back up to 30% of the proposed JV within one year of the second earn-in, or the announcement of a measured and indicated resource estimate in excess of 500 000 t of contained copper. The company would be required to pay four times the total earn-in expenditure incurred by Regal.
In the event that the miner exercised its claw back rights, Ivanhoe would be required to contribute to exploration and development costs, on a pro-rata basis.