Rio enters JV option with Valor

RIO Tinto subsidiary Kennecott Exploration (KEX) has inked a Joint Venture option deal with ASX-listed Valor Resources over its Berenguela copper-silver-manganese project in south-eastern Peru.

Initial terms of the agreement included a payment of $US700,000 before February 2019, and further $US2 million spend on exploration over the next 12 months.

At the completion of initial expenditure, Kennecott would be entitled to form a 50:50 incorporated joint venture by paying an additional $US3 million to Valor, and increase its stake to 75 per cent by spending an additional $US5 million within three years.

Valor Resources executive director Nicholas Lindsay said bringing Kennecott in as a partner to the project was a significant and exciting step forward in its development, and endorsed the project’s value.

“We welcome KEX’s involvement in the project’s development going forward and we are encouraged about the exciting near and longer term prospects,” Mr Lindsay said.

The Berenguela project had a measured indicated and inferred JORC Reserve of 45.9 million tonnes at 0.77 per cent copper, 86 grams per tonne silver, 0.28 per cent zinc and 5.1 per cent manganese.

A Pre-Feasibility Study was currently in the works, which was determining the metrics of developing a shallow open pit mine.

Perth-based junior Valor also owned the Picha copper-silver project in Peru, which did not form part of the agreement.