Antipa Minerals has announced that Rio Tinto Exploration has opted to proceed to the second stage of the farm-in agreement for the Citadel Project in Western Australia.
Under the farm-in agreement, Rio Tinto needs to invest $8m as exploration expenditure within the next three years to earn 51% joint venture interest in the Citadel Project.
The decision to proceed to the second stage follows satisfactory completion of the first stage, which Rio Tinto funded $3m as exploration expenditure in the property in the first 18 months after execution of the farm-in agreement.
Antipa managing director Roger Mason said: “The decision by Rio Tinto to proceed with Stage 2 of the agreement is a ringing endorsement of the quality of the Citadel Project and its exploration upside in the Paterson Province of Western Australia.
“Rio Tinto’s commitment to also take over the operations will bring valuable technical expertise and insights to the project, and provides further endorsement of Antipa’s exploration achievements so far at Citadel.”
Under the agreement, Rio Tinto has also chosen to become operator of the project.
For further phases of the farm-in agreement, Rio Tinto can invest $14m in the third stage within an additional three-year period to earn a 65% joint venture interest. Antipa may choose to contribute at this point to maintain its 35% stake in the property.
In the next stage, Rio Tinto needs to bear $35m in exploration expenditure within another three-year period to earn a 75% joint venture interest.
In the second phase, Rio Tinto can withdraw from the farm-in agreement only after investing $2m as exploration expenditure. It can withdraw after the completion of an annual exploration programme.