Canadian mining company Hudbay Minerals and Marubeni have signed a memorandum of understanding (MoU) for a multi-year exploration partnership pertaining to the former’s existing processing facilities in Flin Flon, Manitoba, Canada.

The companies have agreed to negotiate the definitive agreement terms to govern the Flin Flon properties and the relationship between the parties.

The MoU contemplates Marubeni funding approximately $10m–$15m in exploration expenditures on the project properties while Hudbay will serve as operator and undertake exploration activities.

Hudbay president and CEO Peter Kukielski said: “This exploration partnership would allow us to couple our operational and exploration expertise with Marubeni’s balance sheet strength to test our large Flin Flon land package and potentially revive our dormant Flin Flon processing facilities.”

Furthermore, the MoU envisages a future joint venture between Marubeni and Hudbay if the exploration work results in new deposit discoveries in the Flin Flon region.

Upon satisfaction of certain earn-in obligations, Marubeni is expected to have the option to acquire a minority stake in the projects. This would allow the parties to jointly pursue the projects’ development.

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By GlobalData

Marubeni copper mining department general manager Masafumi Ichigetsu said: “This exploration partnership would give us access to the Flin Flon Greenstone Belt, one of the most prospective base metal VMS [volcanogenic massive sulphide] camps in the world.

“We see tremendous opportunity in this camp where we have the ability to partner with Hudbay and benefit from their technical expertise and proven track record of successful discovery, development and operation of many mines in the region.”