(MENAFN- ProactiveInvestors - Australia) Aeon Metals (ASX: AQR) has attracted the likes of mining giant Rio Tinto (ASX: RIO) as a partner for the exploration of one of its tenements on Queensland.
The pair inked an exploration and earn-in joint venture agreement over tenement EPM 17060.
This transaction highlights the prospectivity of the mineralised province for multiple large base metal ore bodies such as Aeon's Greater Whitewash Polymetallic Project, which lies on the geological north-south structure about 3 kilometres from the border of EPM 17060.
Under the agreement, Rio Tinto will sole fund an exploration program and any associated expenditure to a minimum of A$200,000 within the first 12 months.
If Rio decides to conduct further exploration then it will commit to a total expenditure of $2.5 million over three years to earn its initial interest.
Rio and Aeon will then form an unincorporated joint venture to continue the project with Rio holding a 70% interest and Aeon a 30% stake.
Aeon must then notify Rio within 30 days whether or not it plans to contribute its share of future funding to the project.
If Aeon elects not to contribute its share of future funding, Rio will have no further obligation to fund the project but may choose to continue to sole fund it, committing to an expenditure of $15 million or the completion of a Pre-Feasibility Study within five years to earn an additional 20% interest.
Greater exploration
The earn-in and joint venture with Rio will allow Aeon to focus its exploration and development on the Greater Whitewash, John Hill and Kiwi Carpet Projects along strike to the north.
Aeon's John Hill copper-molybdenum project has been identified as a large mineralised copper system with the presence of an extended chalcocite supergene zone.
Drilling at the project during the September 2012 quarter resulted in the intersection of significant mineralisation in all four holes drilled.
Like Greater Whitewash, John Hill is a polymetallic deposit. However in this case copper is the dominant economic element.
Aeon's recent focus has been to step out on the initial successful John Hill drill campaign undertaken at the beginning of the year, with a view to identifying the deposit characteristics.
This has been achieved and the next step is to undertake a drill campaign to incorporate both known mineralisation at John Hill and Kiwi Carpet, an area which covers about 12 square kilometres, to delineate a large tonnage copper-molybdenum resource base.
Due to the proximity to Greater Whitewash, John Hill and Kiwi Carpet have the potential to add substantially, open pit tonnes and copper grade, to the economics of a centralised Greater Whitewash processing plant.
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