(RTTNews) - BHP (BHP.AX, BLT.L, BBL, BHP) and Encounter Resources has reached an option agreement covering the 4,500km2 Elliott Copper project in the Northern Territory, the companies said.
Following the completion of a jointly designed validation program, BHP has the right to enter an earn-in and joint venture agreement to earn up to 75% stake in Elliott by spending up to A$22 million over 10 years.
Upon BHP completing the earn-in, a 75:25 joint venture will be formed and the companies must contribute funds based on their percentage interest to maintain their respective interests or dilute according to a standard dilution formula.
If a party's interest dilute to below 10%, it shall automatically convert to a net smelter royalty.
BHP has the right to be the Manager of the project, during the earn-in phase.
A program of compilation, interpretation and modeling of the data packages at Elliott has been designed with BHP and will be completed by the parties before 31 December 2020.
Following completion of the program, BHP may elect to fund additional validation programs during 2021 prior to making a decision on whether to exercise its option and to enter into a earn-in and joint venture agreement.
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