West Perth-based Rubicon Resources Ltd has entered into share subscription deed, evalution and farm-in agreement over its Warburton copper project with the world's second largest mining company by market capitalisation, Brazil's Vale.
Under the terms of the deed, Vale subsidiary CVRD Australia EA Pty Ltd will immediately subscribe for 4 million shares at a price of $0.25 each, to raise $1 million.
The transaction will increase Vale's stake in the company to approximately eight per cent, making it Rubicon's single largest shareholder.
Rubicon will spend approximately $1 million on the intitial evaluation and exploration of its Warburton project over a maximum period of eight months.
Subject to CVRD EA board approval at the end of the period, Vale will spend $3 million over a three year period on further exploration and potential development, after which it may exercise an option to enter into an exploration joint venture agreement with Rubicon, thereby earning 51 per cent of the project.
Rubicon managing director Peter Eaton said the Warbuton project was in a remote project area comprising 3,200 square kilometres of exploration licences where its immediate target is a world-class copper deposit.
Mr Eaton said Native Title access agreements with the Ngaanyatjarra people were in place for all of the western leases, which would enable the commencement of exploration programs in the 2008 field season.
"This agreement [with Vale] secures initial exploration funding for the project, the involvement of a major partner that will be providing technical input and resources and the strong potential for ongoing funding of a major base metal exploration and development project right through to the completion of a successful BFS," he said.
