OZ Minerals has completed due diligence at the Wollongong copper farm-in and joint venture (JV) with Resolution Minerals in the Northern Territory, revealing it will spend $4.9 million on exploration at the project over five years.
The Adelaide-based company can earn a 51 per cent interest in Wollongong by making this investment. Resolution would hold the remaining 49 per cent if it pays for exploration expenditure from the sixth year.
However, OZ Minerals can earn as much as 75 per cent of the project by funding and delivering a final investment decision to mine if Resolution does not participate in exploration expenditure in the sixth year.
The JV partners have also started a two-year initial period with a $1.6 million minimum spend.
“The partnership with OZ Minerals has secured long-term funding, technical exploration collaboration and mining expertise to explore the current identified targets with potential to discover the next large-scale copper mine in the Northern Territory,” Resolution managing director Duncan Chessell said.
“The 25 per cent carried interest for Resolution to decision to mine is a significant value add for Resolution shareholders without dilution.”
Planning, technical collaboration, drill targeting and permitting remains ongoing at the project, according to Resolution.
The JV will commence an extensive drilling program from May 2022 until November that year.
Resolution will own 100 per cent of the project for the first two years of the partnership, which will form a JV in the third year.
“This agreement allows Resolution to advance three major projects simultaneously – the others being the 64North gold project in Alaska (which surrounds Northern Star’s 11 million ounce Pogo gold mine) and the nearby Benmara battery metals project in the Northern Territory,” Chessell said.
“This puts the company in a very strong position as a junior explorer with exposure to multiple projects of in-demand commodities in top 20 ranked mining jurisdictions.”