West Perth-based Breakaway Resources has signed a $10 million joint venture agreement with BHP Billiton over the Eloise copper mine in Queensland.
West Perth-based Breakaway Resources has signed a $10 million joint venture agreement with BHP Billiton over the Eloise copper mine in Queensland.
The announcement is below:
Breakaway Resources Limited (ASX: BRW - "Breakaway") is pleased to announce that it has entered into a Farmin and Joint Venture, termed the Altia Joint Venture Project ("Altia"), with BHP Billiton Minerals Pty Ltd (ASX: BHP - "BHP Billiton"), on Breakaway's 100%-owned Eloise Regional Exploration Project, located 4km south west of the Eloise Copper Mine in the Cloncurry district of Queensland (Figures 1-3). The joint venture project covers an area of approximately 8km2 and hosts the Altia Silver-Lead-Zinc Deposit where Breakaway has previously announced a JORC Code compliant Inferred Resource of 5.78Mt @ 40.3g/t silver, 3.96% lead and 0.49% zinc (7.5Moz of contained silver and 229Kt of contained lead).
Under the agreement, BHP Billiton can earn a 70% interest in the silver-lead-zinc rights at Altia by completing expenditure of A$10 million over five years. BHP Billiton must spend a minimum of A$1 million within the first year of the Joint Venture. On BHP Billiton reaching its 70% interest, Breakaway's 30% interest may be sold to BHP Billiton. If Breakaway elects not to sell its interest, it must contribute on a pro rata basis to the cost of ongoing exploration and a Bankable Feasibility Study. BHP Billiton retains a right to purchase Breakaway's 30% interest following completion of a Bankable Feasibility Study and before a decision to mine is taken.
The value of Breakaway's 30% interest for sale purposes following completion of a Bankable Feasibility Study is to be determined by negotiation with BHP Billiton at the time, or failing that, by an Independent Expert engaged by both companies.
Breakaway retains 100% of copper-gold rights within the Altia Joint Venture Project and the rights to 100% of all minerals within the broader Eloise Exploration Project. Breakaway can explore for copper-gold on the Altia ground under a mutually convenient cooperative arrangement with BHP Billiton.
Under the agreement BHP Billiton on behalf of Breakaway, will apply for Mineral Development Licences over the project area. Upon BHP Billiton completing the A$10M earn in, the Mineral Development Licences will be held 70% / 30% by the joint venture partners.
The Joint Venture agreement is consistent with Breakaway's previously announced strategy of rationalising its extensive Australian minerals portfolio to enable it to focus on its core nickel sulphide exploration projects in Western Australia, while at the same time ensuring that expenditure is secured to progress high-potential assets such as Altia. BHP Billiton is expected to commence a programme of deep drilling in early 2010, following the wet season, targeting the potential for a world-scale Cannington-style silver-lead-zinc deposit at Altia.
