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(Sharecast News) - Orosur Mining has signed a joint venture agreement with Meridian Mining UK, it announced on Friday, in relation to the Ariquemes tin project in Brazil.
The AIM-traded firm said the venture terms were "largely in line" with those in the letter of intent it signed in July, in which it could earn an equity interest of 75% in the project by spending $3m over four years, in two phases.
It said the first phase would see it earn a 51% interest by spending $1m over 24 months, while the second would see it earn an additional 24% interest by spending $2m over a subsequent 24 months.
Following that, the two parties would jointly fund the project on a pro-rata basis, or dilute to a net smelter royalty.
The company said the joint venture would require two new corporate entities to be formed to hold the exploration licences and applications, which would include a top holding company in Canada and a local operating company in Brazil.
It said that process was starting immediately, but could take several months, at which point the granted licences would begin to be transferred across to the new structure and the joint venture could formally begin.
In the meantime, Orosur said it would immediately start desktop exploration work, data compilation, regional targeting, formulation of exploration plans and budgets and logistical planning.
Members of iots board, executive and technical specialists would be on site in the coming days to launch the process.
The company said Ariquemes comprises a large collection of granted tenements and applications, totalling almost 3,000square kilometres, in Rondônia State, western Brazil.
It said the licences were all accumulated and wholly owned by Meridian, via its local subsidiary, and represented the dominant land position in the Rondônia Tin Province, which it described as one of the world's most significant tin regions.
The region was identified by Meridian following extensive conceptual work, with later regional work confirming the project's potential.
A database of historical and recent exploration data was available, and had been reviewed by Orosur.
The company said it had around $5m cash on its balance sheet, and was thus "well-placed" to fund the initial works from its existing resources.
"We are excited to have finally completed this agreement," said chief executive officer Brad George.
"With Anza handed over and Covid-19 finally abating, the ability to move to a new phase of work for the company is something we have been anticipating for some time.
"Ariquemes represents a tremendous opportunity with a huge land holding in a proven district, for one of the sector's most important, and yet overlooked commodities."
At 1351 GMT, shares in Orosur Mining were down 1.48% at 13.3p.
18 Aug 2014 12:43