LCL Resources Limited announces that it has signed a binding earn-in and joint venture agreement (Farm-in Agreement) with Rio Tinto Exploration (PNG) Limited (Rio Tinto), for Rio Tinto to earn-in to the Company’s Ono Project in Papua New Guinea (PNG).
Highlights:
• Rio Tinto to make total cash payments of up to A$1.5 million to LCL, payable in stages linked to defined milestones.
• Rio Tinto may earn an initial 51% interest in the Ono Project by sole funding a minimum of A$8 million in exploration expenditure which must include at least 4,000 metres of drilling.
• Rio Tinto may increase its interest in the Ono Project to 80% by sole funding further exploration expenditure of A$40 million or defining a JORC-compliant Mineral Resource of at least 1,250,000 tonnes of contained metals on a copper-equivalent basis and completing a Scoping Study on such Mineral Resource.
• The transaction provides substantial exploration funding, validating the prospectivity of the Ono Project following recent high‑grade gold and silver results.
Executive Chairman Chris van Wijk commented:
“This transaction is a transformational step for LCL. Partnering with Rio Tinto brings world-class exploration capability and substantial funding to the Ono Project, enabling a level of exploration activity that would not otherwise be possible for a company of our size. Importantly, the structure allows LCL shareholders to retain significant exposure to exploration success and any potential discoveries funded by Rio Tinto. We look forward to watching the Ono Project develop alongside one of the world’s leading miners.”
Background
LCL has been collaborating with Rio Tinto for over a year on regional fertility and prospectivity of the Company’s tenements in PNG, a process which has ultimately resulted in this Farm-in Agreement. Rio Tinto has been actively exploring for copper porphyries in PNG for many years and has accumulated an extensive database with which they assess regional opportunities.
The Ono Project has many features in common with recognised copper porphyry systems in PNG. The existing gold skarn resource at Ono2, combined with high‑grade base metal concentrations in the lower limestone unit, provides important proof of concept that there is potential for a larger copper porphyry exploration target within the Project area. The copper porphyry prospectivity, with significant areas of the Project area having had very limited exploration, has attracted the interest of Rio Tinto to the Ono Project.
Ono Project Prospectivity and Key Features
The Ono Project is located in southern PNG, around 150 km south of the port of Lae. The Project is situated in the Owen Stanley Metamorphic Belt – the same belt that hosts the Hidden Valley gold mine and the Wafi-Golpu copper/gold project.
