Redhawk Resources (TSE:RDK) is partnering with Anglo American (LON:AAL) to develop its Copper Creek project in Arizona, it said Tuesday.
Through a joint venture that has yet to be formed, Anglo American will earn a 60 percent interest in the project, by funding US$44 million of expenditures over a five year period, with a commitment to fund at least US$3 million in the first year.
The London-listed mining giant can also earn another 20 percent in the project by funding a further US$20 million in expenses before seven years after the effective joint venture date.
Redhawk will be the operator for the first three years, after which time Anglo American will become the operator.
"Anglo American is a respected global mining company with ready access to experienced people, technology, and capital," said Redhawk president and chief executive officer, R. Joe Sandberg.
"Copper Creek currently has a significant mineral resource and the potential for expansion in numerous areas. Partnering with one of the world's largest mining companies will provide Redhawk with many advantages for the methodical exploration of the upside potential and eventual exploitation of the deposit."
The copper-molybdenum project stretches across 29 square miles in San Manuel, and is made up of patented and unpatented mining claims and state prospecting permits. It is in the southwest US porphyry copper belt, at the projected intersection of a major northwest belt of porphyry copper deposits or mines and a large east-northeast belt of deposits.
Copper Creek is also within 30 miles of an existing operating copper mill and smelter, and is within sight of the former BHP Kalamazoo mine.
The joint venture is still subject to due diligence, as well as the execution of a definitive agreement. Redhawk expects to close the deal this month, as Anglo has already confirmed satisfactory results from technical due diligence on the project.
Work is expected to proceed at an accelerated pace once the joint venture is established, Redhawk said.
Shares of the company rose 4.5 percent to 23 Canadian cents in Toronto on Tuesday.