Red Hill Minerals has entered a conditional binding heads of agreement with Peel Far West, a subsidiary of Peel Mining, to earn a 75% interest in the Curnamona Project in Australia.

Under the five-year farm-in agreement, Red Hill, or its wholly owned subsidiary, may earn an initial 75% stake in the Curnamona Project Tenements by spending A$6.5m on exploration during the farm-in period.

Following this, the parties will form a JV in respect of the tenements.

Red Hill executive chairman Joshua Pitt said: “The Curnamona tenements provide Red Hill with an opportunity to explore for Tier 1 Zinc-Lead-Silver deposits throughout the highly prospective Broken Hill region and an opportunity to advance a proven copper target at Anabama in South Australia.

“The company is excited to progress exploration of the Curnamona tenements in parallel with the West Pilbara Gold and Base Metals Project and will continue to assess future projects to add to the exploration portfolio.”

The transaction is subject to several conditions, including the execution of a formal agreement consistent with the terms of the heads of agreement, completion of due diligence to the satisfaction of Red Hill and the renewal of Tenement EL8877.

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Upon satisfying these conditions, Red Hill is required to incur a minimum of A$1.5m on in-ground expenditure within the first 24 months before it is entitled to withdraw from the agreement.

Upon earning a 75% interest, a JV will be formed with Red Hill being the manager. Peel Far West will own the remaining 25% interest.

Peel Mining technical director Rob Tyson said: “In recent years, Peel has assembled a major land position in the Curnamona with the view that the prospective rocks have potential to host a Tier 1 deposit, akin to the giant Broken Hill lead-zinc-silver orebody. Previous limited historic drilling at the Curnamona tenements has intercepted occurrences of Broken Hill type mineralisation, an indication of the potential that could be lurking beneath the cover.

“The Anabama tenement in South Australia contains the underexplored namesake Anabama copper prospect and here Peel sees good potential for the discovery of a large scale, near surface copper deposit.”