Valor Resources Ltd (ASX:VAL) has signed a joint venture option agreement with Kennecott Exploration Company, part of the Rio Tinto group, in respect of the Berenguela copper-silver-manganese project in Peru.
Kennecott will spend US$2 million on exploration expenditure on the project over the next 12 months.
During this time, Kennecott will be solely responsible for designing and implementing the exploration program. Any assistance required from Valor will be reimbursed at cost plus 10%.
Following the satisfaction of the initial expenditure, Kennecott can exercise an option to form a 50:50 incorporated joint venture with Valor on payment of an additional US$3 million to Valor.
After the formation of the joint venture, all costs, management, and decision making will be shared pro rata.
#BreakingNews Leading global mining company shows interest in Valor Resource’s Berenguela Project in Peru.$VAL #valorresources #copper #mining #news pic.twitter.com/GjftXbBRDc
— Valor Resources (@valorresources) January 14, 2019
Valor believes that the introduction of Kennecott as a partner to the Berenguela Project is a significant step forward in its development.
In addition to endorsing its current value, the deal speaks to the highly prospective development potential of the Berenguela mineral system.
READ: Valor Resources advancing polymetallic project in Peru as positive news flow continues
As part of the Rio Tinto group, Kennecott has access to a depth of exploration and mine development personnel, and access to the required levels of capital to ensure the project’s future going forward.
Consent for the above arrangement has been granted by SSR Mining Inc who still holds a mortgage over the Berenguela Project following the original acquisition by Valor.
Kennecott will pay SSR US$700,000 prior to February 2019 to cover the due installment payable.