Mirasol Resources Ltd. (TSXV:MRZ) announced that it has signed a binding Letter Agreement with First Quantum Minerals Ltd. (TSX:FM,LSE:FQM). Together, the companies will explore and develop Mirasol’s Chile-based Rubi property, which is located within a porphyry belt that hosts “many world class porphyry copper deposits.”
As quoted in the press release:
The Agreement provides for First Quantum to earn a 55% interest in the Rubi Property upon completion of a US$6.5 million investment in exploration over four years from the date of signing the Agreement, and a total of US $1.1 millionin staged cash payments. The Agreement provides for exploration expenditure commitment during the first year ofUS$1.5 million, to include a commitment for magnetic survey of the claims and 3000m of drilling. After earn-in, First Quantum’s participating interest may be increased to 65% on completing a N.I. 43-101 compliant resource estimate and PEA (Preliminary Economic Assessment) on a minimum size resource of 1 million tonnes of contained Cu. First Quantum may further increase its interest to 75% by declaring a ‘decision to mine’, and will provide mine financing at commercial terms if requested by Mirasol. Financing terms include interest calculated at LIBOR+4% and repayment of Mirasol’s proportional mine finance from 50% of cash flow.