Australian Securities Exchange (ASX)-listed Golden Mile Resources has signed a binding term sheet with Outcrop Silver & Gold to acquire the Pearl Copper Project in Arizona, US.

The deal involves an initial payment and potential further investments totalling A$12m, alongside a NSR royalty agreement.

Under the agreed terms, Golden Mile will have to pay Outcrop A$100,000 on the settlement of the definitive agreement and issue a 1% NSR royalty on the production of copper, gold and other metals.

This initial step paves the way for a definitive agreement and the establishment of a joint venture between the two companies.

Golden Mile may earn a 51% interest in the Pearl Project by investing A$2m within the next three years.

To acquire an additional 34% stake, Golden Mile must spend A$10m over the subsequent five years.

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Furthermore, a A$2m payment to Outcrop is contingent upon identifying a JORC-compliant resource of at least 750,000 tonnes of copper with a minimum grade of 0.3%.

Should either company fail to meet their joint venture (JV) obligations and their interest falls below 10%, they will receive an additional 1% NSR royalty instead.

Golden Mile also has the option to withdraw from the JV after spending a minimum of A$250,000 on the claims, after the settlement date.

The Laramide Porphyry Copper Province, where the Pearl Copper Project is located, contributed to roughly 70% of the country’s copper output in 2023.

It is situated immediately north of BHP’s San Manuel-Kalamazoo Mine and within the same geological trend as Capstone Copper’s Pinto Valley mine.

Golden Mile managing director Damon Dormer said: “A unique set of circumstances has provided Golden Mile with an opportunity to enter the Laramide Porphyry Belt, a Tier 1 jurisdiction, for a minimal upfront outlay.

“The presence of two historical underground mines within the Pearl Project, no modern exploration, numerous copper workings, significant rock chip values and a location within a world-class copper province containing many significant deposits and mines.

“This demonstrates the exciting exploration potential of this project for Golden Mile, and we aim to hit the ground running upon execution of the definitive agreements.”