Teck Australia has entered an option deal to acquire Redbank West tenements in Northern Australia from NT Minerals.
Teck plans to acquire the tenements, namely EL32464, EL32465, EL32466 and EL32467, over a four-year period.
These copper tenements are located 80km south of Borroloola and are adjacent to the McArthur River and Merlin mines.
NT Minerals said: “During the term of the option, Teck will maintain all tenements in good standing.”
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The company can exercise the option after making a total payment of A$1m ($635,681) in cash.
Within five business days of executing the agreement, it needs to pay A$200,000.
On the first anniversary of the agreement, it has to pay an additional A$100,000, followed by another A$100,000 on the second anniversary.
On the third anniversary, it needs to pay another A$200,000. The final payment will be made on the fourth anniversary, which will amount to A$400,000.
After completing all the payments, Teck will be nominated as the operator and can take up the responsibility of rents, environmental bonds and satisfying minimum expenditure commitments.
Besides, NT Minerals will receive a 2% net smelter return royalty. There is a put-and-call option for 1% of the royalty at A$3m ($1.9m) after a positive decision on the project has been made until the first anniversary of achieving production.
NT Minerals executive chairman Mal James said: “We are pleased to work with Teck to undertake exploration away from our key area of focus at Redbank. This option will maintain exploration while minimising overheads for NT Minerals.”