Mogotes Metals (TSX-V:MOG) has entered a binding term sheet with Rio Tinto (ASX:RIO) Exploration Canada for gross proceeds of around US$15 million ($21.5 million).
Rio Tinto Exploration Canada, or one of its affiliates, will subscribe for 30.38 million units of Mogotes at C$0.70 per unit.
Each unit consists of one common share and one-half of a common share purchase warrant, with each whole warrant entitling the holder to acquire one additional common share at an exercise price of C$1.
Following the closing of the placement, Mogotes and Rio Tinto will enter a strategic and technical alliance focused on the Filo Sur Project in the Vicuña district of Argentina and Chile.
The placement will initially give Rio Tinto around a 5% interest in Mogotes, with the two companies open to further long-form agreements. Upon completion of the placement, Rio Tinto will receive a 15-month exclusivity period in which it will be entitled to acquire up to 9.99% of the common shares in Mogotes.
The alliance between the two companies will provide Mogotes’ exploration team with Rio Tinto’s global technical capabilities.
Among the initiatives will be the formation of a joint technical committee, application of Rio’s proprietary geoscience tools for Filo Sur, joint efforts to expand the land position in the broader Vicuña district, and the opportunity for additional exploration in prospective mineral belts, including in Kazakhstan.
Mogotes CEO Allen Sabet says that this investment is a “powerful endorsement of the prospectivity of Filo Sur and the broader Vicuña district”.
“The alliance gives our team access to one of the deepest exploration capabilities in the industry while preserving Mogotes’ ability to deliver value to all shareholders.”
Mogotes Metals is a copper, gold, and silver explorer advancing three porphyry projects with tier-one potential across three continents.
Write to Amy Rotman at Mining.com.au
Images: Mogotes Metals
