Rio Tinto (ASX:RIO) can earn up to 80% of the Liamu Copper-Gold Project in Papua New Guinea (PNG) from LCL Resources (ASX:LCL) under a newly executed binding term sheet.
The agreement marks the second farm-in between the two companies in PNG, following the Ono Project agreement announced on 23 March.
Under the terms, Rio Tinto earns an initial 51% interest by sole funding at least $6 million in exploration, including 3,000m of drilling, within five years.
It can then lift its stake to 80% by spending an additional $40 million, or by defining a mineral resource estimate of at least 1 million tonnes of contained copper (or copper equivalent) and completing a Scoping Study.
LCL will manage operations and receive a management fee of up to 10% of exploration expenditure. Rio Tinto must spend at least $200,000 within 12 months of obtaining land access before it can withdraw.
Executive Chairman Chris van Wijk says the transaction validates the company’s work in the country.
“A second agreement with Rio Tinto is a strong endorsement of the quality of LCL’s PNG portfolio and of the groundwork our team has completed at Dada and Ubei,” van Wijk says.
The transaction remains subject to PNG ministerial approval and registration against exploration licence EL2432, with a termination deadline of 30 September 2027 if conditions are not satisfied.
LCL Resources is a mineral explorer and developer focused on discovering and advancing gold, copper, and nickel projects.
Write to Paula Fabe at Mining.com.au
Main image: LCL Resources
