Mineral sands developer Strandline Resources has signed an earn-in and joint venture (JV) agreement with heavy mineral sands producer Rio Tinto.
The new agreement will be worth up to $10.75m, and relates to Strandline’s suite of heavy mineral sands (HMS) tenements in southern areas of Tanzania, as well as an adjacent project area.
Rio has the option to earn up to 75% interest in Strandline’s southern Tanzanian portfolio of tenaments, by spending up to $9m on project-related expenditure via a two-stage initative.
The JV only currently pertains to a selected portion of Strandline’s tenement portfolio, which is spread over 350km of Tanzanian coastline.
Strandline also noted that the JV helps to speed up exploration activities on the project area.
The arrangement's terms state that Rio is responsible for providing expertise and funding for the planned collaborative developments.
Strandline managing director and CEO Luke Graham said: “This transaction delivers a strong source of funding and regional mineral sands expertise to significantly enhance the development potential of the company’s southern ground in Tanzania, with a view to ultimately developing one or more economic mineral sands mines.
“Execution of this JV follows keen interest from several global mining houses and investors, reinforcing the prospectivity and investment potential of Strandline’s Tanzanian mineral sands assets.
“Along with the company’s current development programmes at Fungoni and Tanga further to the north, this JV positions the company strongly to unlock the value of its entire land holding in Tanzania.
“Rio Tinto has undertaken technical reviews and site inspection of the project area and this agreement contemplates mobilisation of exploration activity led by Strandline as soon as practicable to take advantage of the current field season.”
Strandline will remain as the manager until such a time that Rio earns over 50% stake, while the commitment is expected to be completed within two months and subject to due diligence requirements.