Rio Tinto has entered into a farm-in agreement with West Wits Mining regarding the Mt Cecelia project in the East Pilbara region of Western Australia.
The Tier 1 miner is represented by its wholly owned subsidiary Rio Tinto Exploration at the project, while West Wits subsidiary Northern Reserves will be responsible for the latter’s involvement in Mt Cecelia.
As part of stage one of the earn in, Rio Tinto will be required to pay an initial $150,000 and, subject to land access, undertake a minimum of 800 metres of diamond core and/or reverse circulation drilling at Mt Cecelia before December 31, 2022.
Rio Tinto can earn a 51 per cent interest in the project if the company invests a minimum of $4 million into the farm-in over the first four years.
Once Rio Tinto has achieved a 51 per cent stake in Mt Cecelia, a joint venture (JV) will be established. The company will then have the right to sole fund a further $6 million within three years of the JV formation to earn an extra 29 per cent interest.
In doing so, Rio Tinto will be required to pay West Wits a further $250,000.
If either Rio Tinto reaches its sole funding milestones and earns a total 80 per cent interest in Mt Cecelia or the company does not elect to sole fund stage two of the farm in, either party can elect to contribute expenditure proportionate to its interest in the JV, or have it diluted.
Further JV provisions are subject to the level of dilution each party chooses to take, with a potential buy out if either company’s interest falls below 10 per cent.
West Wits managing director Jac van Heerden said given Rio Tinto’s familiarity of the area, it is the best suitor to take Mt Cecelia forward.
“The strength of the electromagnetic survey results for the Mt Cecelia project has been highlighted by Rio Tinto, a global Tier 1 mining company, committing significant expenditure to advance exploration and drilling in 2022,” he said.
“RTX (Rio Tinto Exploration) brings a wealth of technical expertise, resources and regional knowledge which, combined with synergies from their exploration of Mt Cecelia’s neighbouring tenements (that are held 100 per cent by RTX), will enable the Mt Cecelia targets to be rapidly and systematically tested.”
Covering 225 square kilometres of territory, Mt Cecelia is located on the border of East Pilbara and Paterson provinces in Western Australia.
Electromagnetic surveys completed by West Wits have found four Mt Cecelia targets to be related to legitimate bedrock-related conductors, with gold, polymetallic volcanogenic massive sulphides (VMS) and manganese prospective.