Regal Resources inks MoA with Ivanhoe Mines

THE BOURSE WHISPERER: Regal Resources (ASX: RER) has signed a binding conditional Joint Venture Memorandum of Agreement (JVMOA) with 100 per cent-owned subsidiaries of Ivanhoe Mines (TSX: IVN).

The JVMOA gives Regal the opportunity to acquire a 98 per cent interest in a package of tenements located near the western end of the Central African Copperbelt in the Katanga Province of the Democratic Republic of Congo.

Regal said previous exploration carried out by Ivanhoe, including geophysical data interpretation, geological mapping, geochemical sampling and auger, RC and diamond drilling, has identified a number of interesting targets, which have returned economic intersections of copper mineralisation yet have not as been subject to any detailed follow up work.

“We are very excited about having signed this agreement with Ivanhoe after a lengthy process of negotiation and documentation,” Regal Resources managing director David Young said in the company’s announcement to the Australian Securities Exchange.

“Regal considers these Permits to have excellent potential for significant economic discoveries and they further strengthen the company’s strategic position in the largest and most prolifically mineralised sediment-hosted copper province known on earth.

“It is also another demonstration of our commitment to develop the minerals potential of the region.

“Regal will also be able to benefit from the very high standard of work already completed by the Ivanhoe exploration team over parts of the JV area.

“The comprehensive technical database will allow the company to take a focused approach to exploration, following up high priority targets that have the potential to support future growth of the company while continuing to rapidly advance the company’s flagship Kalongwe project towards mine development.

“Exploration costs should be reduced as Regal is already well established in the region and working with a team of geologists with excellent local knowledge of both the terrain and the geology.”

Key Terms of the Agreement between Regal and Ivanhoe are:

Regal will be required to pay an Initial Signing Fee of US$100,000;

Regal will be required to pay a non-refundable Subsequent Signing Fee of US$150,000, no later than the first anniversary of the signing of this agreement;

Regal can earn 80 per cent by expending US$3 million expenditure by no later than 3 (three) years after the Effective Date (First Earn-In); and

Regal can earn 90 per cent by expending US$3 million expenditure by no later than 2 (two) years after the First Earn-In (Second Earn-In).

By expending the Earn-In amounts referred to above, Regal will have the option to acquire a further eight per cent at an agreed price.