THE BOURSE WHISPERER: Tasman Resources has executed a formal Farm-in / Joint Venture Agreement with Rio Tinto Exploration that will result in Rio making a non-refundable execution payment of $1million to Tasman.
The new agreement replaces the conditional Farm-In/JVA Letter Agreement reached between the two parties in October 2011 over Tasman’s wholly owned Exploration Licence EL 4322 that hosts the Vulcan iron oxide/copper/gold/uranium (IOCGU) prospect, situated immediately north of Olympic Dam in South Australia.
Under the terms of the new Farm-In/JVA, Rio and Tasman have retained the original commercial terms governing the Initial Exploration Program and Rio’s farm-in obligations and rights.
In addition to the original commercial terms, Tasman and RIO have agreed to extend the current period for satisfaction of the remaining condition precedent by six months from the date of execution of the Farm-In/JVA.
The condition precedent that remains unsatisfied at the date of the Farm-In/JVA is:
– Tasman securing reasonable access for the purposes of conducting the Initial Exploration Program over a specific area of the Tenement over which Tasman has previously not secured Aboriginal Heritage access.
Tasman has also agreed to grant RIO two options to extend, if required, the time period to satisfy the remaining condition precedent and, if exercised by RIO, to make further payments to Tasman to fund approved exploration on portions of the Vulcan prospect that have gained heritage clearance.
If both options are exercised by RIO, the period for the satisfaction of the condition precedent will be extended by a total of four years from the date of execution of the Farm-In/JVA.
Any payments made by RIO in respect of the aforementioned options to Tasman (including the $1million paid upon execution of the Farm-In/JVA) will be deducted from the initial $10million payable by RIO to Tasman and, similarly, all drilling carried out will also be credited towards the meeting the aggregate 12,000 metres of drilling (Initial Exploration Program) that Tasman is required to complete.