The farm-in agreement will introduce OZ to the prolific Mt Isa copper belt and deliver Minotaur the benefit of a free carried and substantial on-ground spend over the next six years at its Eloise project.
Under the agreement, OZ will sole fund an initial $1.5 million in exploration over 2016. The agreement provides OZ with the option to earn a 70% interest in the project by investing a total of $10 million over a five-year term.
The Eloise project in the Cloncurry region includes Minotaur’s flagship Artemis polymetallic discovery, which led to Minotaur being named Queensland Explorer of the Year in 2014.
The farm-in agreement is the second major partnership announced between OZ and Minotaur in the past two months, the first being an exploration joint venture around OZ’s Prominent Hill copper mine in South Australia.
Minotaur’s managing director Andrew Woskett said Minotaur’s increasing success with its exploration modelling, including high end geophysics, was attracting interest and partnering support from major greenfields and brownfields project owners alike.
“Minotaur is delighted to again partner with OZ Minerals, a pre-eminent Australian copper miner and significant Minotaur shareholder,” he said. “Through our combined technical expertise and depth of experience, the probability of discovery success will be greatly enhanced.
“We look forward to activating drilling at several exciting copper-gold targets Minotaur has recently modelled at and near to the Artemis polymetallic discovery at Eloise.”
The agreement requires OZ to invest a minimum of $1.5 million in 2016, which is intended to primarily fund drilling at the Eloise project. OZ, at its election, can also invest a further $3.5 million into the Eloise project over the two subsequent years. When OZ Minerals has invested at least $5 million into the project it will have earned an initial 51% interest in the tenements and the proposed joint venture.
Minotaur will manage and operate the joint venture until OZ acquires a 51% project interest. OZ can then invest a further $5 million to earn up to a 70% interest over the next three years.
An exploration committee will be formed in order to approve a work program for implementation in early 2016, following north Queensland’s wet season.