PERTH (miningweekly.com) – Junior Red Mountain Mining has reached an earn-in and joint venture agreement with unlisted Unearthed Resources to gain a stake in the Mt Mansbridge rare earths project, in Western Australia.
Under the terms of the agreement, Red Mountain would pay a A$50 000 option fee for a 28-day due diligence period, with a further A$50 000 break fee payable if the company did not proceed with the transaction.
Red Mountain could earn an initial 49% interest in the project by spending A$500 000 within an 18 month period, and by paying a cash consideration of A$150 000 and issuing a further A$350 000 worth of shares, at a price of 5c each, to Unearthed.
The company could then increase its stake to 70%, by spending a further A$1-million over the subsequent 18 month period, and by paying a further A$500 000 in cash and A$500 000 worth of Red Mountain shares.
Red Mountain could take full ownership of Mt Mansbridge by spending a further A$1.5-million on the project, and paying A$500 000 in cash to Unearthed, along with A$1-million worth of shares.
Mt Mansbridge consists of two exploration licences covering a total of 245 km2, which has been subject to uranium, gold and diamond exploration since the 1970s.
Red Mountain director Jeremy King on Monday said that the rare earths project was an exciting opportunity for Red Mountain to obtain leverage to the significant and valuable rare earths market.
“Subject to finalising due diligence, we intend to move forward aggressively on a focused exploration programme at Mt Mansbridge for which we are comfortably fully funded.”