Sipa Resources have announced a Farm-in and JV Agreement with Rio Tinto for their Kitgum Pader Base Metals Project in Northern Uganda.
Under the agreement, Rio Tinto has the option to earn up to a 75% interest in the project by incurring exploration expenditure in the following stages and amounts:
- US$12M of exploration expenditure within 5 years including a minimum commitment of US$2.0M, to earn 51% (Stage 1);
- Additional US$15M of exploration expenditure within a further 3-year period to earn a 65% interest (Stage 2);
- Additional US$30M of exploration expenditure or declaration of a JORC resource containing at least 250,000 tonnes of contained nickel or nickel equivalents within a further 3-year period to earn a 75% interest (Stage 3).
It's not a done deal yet as the agreement is conditional on due diligence being completed and satisfactory to Rio Tinto within three months of signing.
Still, it gave a nice lift to Sipa's share price this morning which is currently trading at 1.2c, up 50% from Friday's close of 0.8c.