- Midnight Sun Mining (TSXV:MMA) has signed an earn-in and joint venture agreement with Rio Tinto Mining and Exploration
- Under the terms of the agreement, Rio Tinto has the option to acquire up to a 75 per cent stake in Midnight Sun’s Solwezi Licences for a total of C$71 million
- There are several stages to the agreement, each of which requires an investment on Rio Tinto’s behalf for an increasing interest in the project
- Midnight Sun Mining (MMA) is currently down 8.33 per cent to $0.16 per share, with a market cap of $15.11 million
Midnight Sun Mining (TSXV:MMA) has signed an earn-in and joint venture agreement with Rio Tinto Mining and Exploration.
Under the terms of the agreement, Rio Tinto will have the option to acquire up to a 75 per cent stake in Midnight Sun’s Solwezi Licenses for a total of C$71 million.
Located in the North-Western Province of Zambia, the Solwezi Licenses are comprised of two individual exploration licenses totalling 506 square kilometres. The site sits adjacent to First Quantum’s Kansanshi Mine, Africa’s largest copper mining complex, on the renowned Zambia-Congo Copper Belt.
An initial payment from Rio Tinto to Midnight Sun of approximately C$983,000 will be required.
After that, Rio Tinto has the option to fund a first-step work program by spending $4.21 million, of which $2.81 million is a firm commitment, within the next two field seasons. Following this, a further payment of roughly $421,000 will be payable to Midnight Sun before Rio Tinto move forward.
Upon completion of this first step, the companies will be able to commence Stage One of the agreement.
Specifically, Rio Tinto will have the option to acquire a 51 per cent ownership of the Solwezi Licenses by putting up a total of $22.47 million in work expenditures within four years. A total of $1.4 million in scheduled cash payments must also be made.
Stage 2 will involve an outlay of another $19.66 million in work expenses for an additional 14 per cent stake. Alternatively, Rio Tinto may complete a Feasibility Study within three years, on top of a $1.4 million payment to Midnight Sun.
Finally, in Stage 3, Rio Tinto may earn a final 10 per cent interest in the Solwezi Licenses by incurring a further $21.07 million in work expenses within two years.
Midnight Sun’s Acting CEO, Al Fabbro, said he is excited to be partnering with one of the preeminent leaders in the global mining industry.
“Rio Tinto’s enthusiasm towards the Solwezi Licences reflects my own. Their expertise combined with their aggressive exploration plans are precisely what I want to see for this project,” he added.
Midnight Sun Mining (MMA) is currently down 8.33 per cent to $0.16 per share at 3:12pm EST.
