Rio Tinto Exploration has signed an agreement with LCL Resources to earn-in to the Ono Project in Papua New Guinea.
The arrangement allows Rio Tinto to earn an initial 51% interest in the mining project by investing at least A$8m ($5.61m) in exploration activities, which will include a minimum of 4,000m of drilling.
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This collaboration aims to uncover porphyry copper-gold deposits.
Further rights enable Rio Tinto to increase its stake to 80% by committing an additional A$40m towards exploration or by defining a mineral resource compliant with the Joint Ore Reserves Committee (JORC) standards.
The resource must comprise at least 1.25 million tonnes of contained metals on a copper-equivalent basis and be accompanied by a scoping study.
LCL will initially manage the project and receive a management fee equivalent to 10% of the expenditure.
The Ono Project is situated within the Owen Stanley Metamorphic Belt, approximately 150km south of Lae port.
This area is known for hosting significant mineral resources such as the Hidden Valley gold mine and the Wafi-Golpu copper/gold project.
The project’s exploration licence includes the Kusi Gold skarn resource and an application for the contiguous Kau Creek area.
The strategic partnership is expected to provide significant exploration funding, underscoring the potential of the Ono Project given recent high-grade gold and silver findings.
The agreement outlines that Rio Tinto will make total cash payments of up to A$1.5m to LCL, disbursed in phases linked to specific milestones.
During the initial phase of the farm-in agreement, if exploration licence application ELA2837 faces delays or rejection, amendments to Rio Tinto’s minimum commitment may be negotiated.
LCL Resources executive chairman Chris van Wijk said: “This transaction is a transformational step for LCL. Partnering with Rio Tinto brings world-class exploration capability and substantial funding to the Ono Project, enabling a level of exploration activity that would not otherwise be possible for a company of our size.
“Importantly, the structure allows LCL shareholders to retain significant exposure to exploration success and any potential discoveries funded by Rio Tinto. We look forward to watching the Ono Project develop alongside one of the world’s leading miners.”
In 2024, LCL received a forest use permit for the Miraflores gold deposit, part of the company’s Quinchia Gold Project in Colombia.
