CITY OF MELBOURNE (dpa-AFX) - LCL Resources Ltd.'s (LCL.AX) shares gained around 23 percent in Australian trading after the mineral exploration company on Monday announced a binding farm-in and joint venture term sheet with Rio Tinto Exploration Ltd., a subsidiary of Anglo-Australian mining giant Rio Tinto group (RIO, RIO.L, RTNTF, RIO.AX), for its Liamu copper-gold project in Papua New Guinea.
The Liamu Project hosts the Dada gold-copper porphyry discovery as well as the high-grade Ubei epithermal gold-copper prospect.
Under the agreement, Rio Tinto may earn an initial 51 percent interest in the project by funding at least A$6 million in exploration expenditure, within five years.
Rio Tinto may increase its interest to 80 percent by funding an additional A$40 million in exploration expenditure or by defining a JORC-compliant mineral resource containing at least 1 million tonnes of copper or copper equivalent.
LCL will initially manage the project and receive a management fee of up to 10 percent of exploration expenditure.
Initial exploration will target areas around the Dada copper-gold porphyry prospect, while further work at the Ubei prospect will also be reviewed.
Rio Tinto is required to fund at least A$0.20 million within 12 months of obtaining land access to EL2432 before it can withdraw from the agreement.
The agreement is subject to Papua New Guinea ministerial approval and registration of the term sheet against exploration licence EL2432. If the conditions are not satisfied or waived by September 30, 2027, either party may terminate the agreement, and LCL must refund any unspent or uncommitted exploration funds advanced by Rio Tinto.
Earlier in March, the companies had signed Ono Project farm-in in Papua New Guinea.
LCL shares traded 23.08 percent higher on the Australian Securities Exchange, closing Monday's trading at A$0.0080.
Rion Tinto shares were trading 0.53 percent higher in the overnight trading on the NYSE, at $83.86, and 0.23% higher in Australia at A$146.61.
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