Canada-based Excelsior Mining has entered an option agreement with Rio Tinto venture Nuton to evaluate the use of the latter’s copper heap leaching technologies at the Johnson Camp mine in Arizona, US.

According to the agreement, Excelsior will operate the mine and Nuton will fund Excelsior’s costs associated with the two-stage work programme at the mine project. Excelsior will initially receive a $3m (C$3.98m) pre-payment from Nuton towards stage one costs.

There will be an exclusive option to form a joint venture (JV) with Excelsior for the mine after an additional payment of $2m is made following the completion of stage two.

Excelsior Mining president and CEO Stephen Twyerould said: “We are very pleased to be moving Johnson Camp forward with Nuton. With their support and technologies, we have the potential to realise the value of the sulphide resources at Johnson Camp in a way that is both economical and beneficial to the environment.

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“Johnson Camp has the potential to progress towards cash flow whilst we continue to develop our other assets, including progressing Gunnison towards well-stimulation trials later this year. The strength of this agreement is that it allows both Gunnison and Johnson Camp to advance in parallel.”

In the stage one work programme, Excelsior will complete diamond drilling, permitting activities, detailed engineering and project execution planning while Nuton will undertake mineralogy, predictive modelling, engineering and other test works.

Based on the results from the programme, Nuton will have the option to proceed with the next stage. The first stage is expected to begin this month and could take between six and nine months to complete.

If Nuton begins stage two, it will pay $5m to Excelsior for using the existing infrastructure at the mine for the work programme. It will also be responsible for funding all of Excelsior’s costs associated with the stage.

The second stage is expected to take up to five years to complete and will advance based on achieving milestones related to engineering, mobilisation, infrastructure and construction, mining, leaching, copper production and post-leach rinsing.

Completion of all milestones will lead to full-scale commercial production at the mine using Nuton’s technology.

Revenue from operations will initially be used to pay back Nuton for stage two costs and then will be credited to Excelsior’s account.

After stage two is completed, Nuton will have the right to form a JV with Excelsior for the mine, in which it will hold a 49% stake. Excelsior will hold the remaining 51%.

The JV aims to continue with the development of the Johnson Camp Mine leveraging Nuton technologies.