Azure pulls off Rio Tinto Earn-In

THE BOURSE WHISPERER: Azure Minerals has pulled off a coup by striking an Earn-In and Joint Venture Agreement with Kennecott Exploration Company, to explore for copper on its 100 per cent-owned Promontorio project, located in the Mexican state of Chihuahua.

Kennecott is part of the Rio Tinto Group of companies.

The total value of the Earn-in and Joint Venture Agreement is worth up to approximately US$95 million to Azure.

Under the terms of the agreement Kennecott will be committed to US$2 million of expenditure within the first 12 months as well as being required to reimburse Azure US$250,000 upon execution of the agreement.

Kennecott will earn a 51 per cent interest in the Promontorio project by spending US$20 million within six years and will earn an additional 29 per cent interest (for a total 80 per cent interest) by spending a further US$25 million over the following six years (totalling US$45 million over 12 years).

Upon formation of a 51:49 JV, and to recognise the value Azure has already established at the Cascada and Promontorio deposits, Kennecott will credit Azure’s JV account with an amount equal to five times Azure’s total exploration and acquisition expenditures to that date.

So far Azure has spent approximately US$10 million.

Azure retains the right to continue its ongoing exploration activities on the Cascada and Promontorio deposits during the earn-in phase.

Azure Minerals managing director Tony Rovira said in the company’s announcement to the Australian Securities Exchange.

“Azure is delighted to join with Rio Tinto/ Kennecott, one of the world’s largest and most respected mining and exploration companies, to explore for very large copper deposits at Promontorio.

“Kennecott’s interest in the Promontorio project and the terms of the proposed Earn-In / Joint Venture Agreement demonstrate the enormous potential of Promontorio.

“This Agreement will enable a significant acceleration in the current exploration and development programs at Promontorio.

“Importantly for Azure, the Agreement allows us to advance our own exploration efforts around Cascada, while concurrently Kennecott will activate exploration throughout Azure’s large landholding during the initial earn in phase.

“Northern Mexico and southern Arizona together form one of the world’s great copper mining provinces and it is a real coup for Azure, as one of the very few ASX-listed companies with exposure to this area, to secure Kennecott’s involvement.”