(Sharecast News) - Natural resources explorer and developer Corcel has entered into a farm-out and joint venture agreement with ASX-listed Riversgold, it announced on Wednesday, covering its recently-acquired rare earth elements project at Mt Weld in Laverton, Australia.
The AIM-traded firm said AUD 30,000 (£17,000) in cash was immediately payable to Corcel.
Riversgold would earn a 50% interest in the project through paying 100% of the work programme, spending AUD 0.5m over a 12-month period.
Corcel said it had the right, but not the obligation, to allow the farm-in of a further 20% for an additional AUD 1m to carry on the work programme, bringing total carried expenditure to AUD 1.5m.
The company said Riversgold would operate the tenements and direct the exploration programme on its behalf.
"We are delighted to directly follow our acquisition of Mt Weld with a farm out of half of the position to fund 100% of the near-term development and exploration costs," said chief executive officer Scott Kaintz.
"This is highly accretive against our acquisition cost and further reinforces the board's view of the project's immediate potential upside and overall attractiveness.
"Our partner, Riversgold, brings with them an experienced exploration team well positioned to lead the work on the ground in Australia."
At 1553 GMT, shares in Corcel were up 10.64% at 0.26p.
Reporting by Josh White for Sharecast.com.
Corcel (CRCL)