The Canadian Arctic project is owned by Anglo Bay.
The memorandum of understanding (MoU) allows Antofagasta to take an interest of up to 70% in the Storm project and also paves way for the proposed joint venture.
Antofagasta will make the investments in four phases.
The miner will initially spend $10m over six years and take a 50.1% stake in Storm; the company will later invest a further $6m over three years, and take the project through a feasibility study.
As part of phase three, Antofagasta will bear the entire expenditure for two years after the completion of the feasibility study. The two partners will pay their pro-rata shares of expenditures in phase six, which will begin two years after the feasibility study report is delivered.
The Storm project has four zones of copper mineralisation, including 110m of 2.45% copper starting from surface; 56m of 3.07% copper starting 12m below surface at the 2750N zone; and 49m of 1.79% copper starting from surface at the 2200N zone.
Aston Bay chief operating officer Bruce Counts said that Antofagasta’s involvement underscores the prospective and compelling nature of the Storm project.
"Antofagasta brings technical depth and expertise to the project and we are eager to begin exploring the property with their group," Counts said.
Aston Bay president and CEO Benjamin Cox said: "Our agreement with Antofagasta will advance the Storm project without significant dilution expected for Aston Bay’s shareholders, and will leave Aston Bay with a meaningful interest in the project."
Aston Bay and Antofagasta are planning to sign a binding agreement to finalise the deal by 1 December.
Image: Aerial views of malachite and azurite copper mineralisation at Storm Copper’s 2200N Zone. Photo: courtesy of Aston Bay Holdings.