Regal Resources Limited (ASX:RER) has signed a binding conditional joint venture memorandum of agreement with subsidiaries of Ivanhoe Mines (TSX:IVN) regarding a package of prospective tenements in the African Copperbelt in the Democratic Republic of Congo. The agreement includes the ability to acquire a 98 percent interest in the tenements.

As quoted in the press release, highlights of the agreement include:

Regal will be required to pay an Initial Signing Fee of USD100,000,
Regal will be required to pay a non-refundable Subsequent Signing Fee of USD150,000, no later than the first anniversary of the signing of this agreement (“Effective Date”),
By Regal expending the amounts referred to below (“Earn-In Expenditure”), Regal can earn 80% by expending USD3,000,000 expenditure by no later than 3 (three) years after the Effective Date (“First Earn-In”), and
Regal can earn 90% by expending USD3,000,000 expenditure by no later than 2 (two) years after the First Earn-In (“Second Earn-In”).
Regal will have the option to acquire a further 8% at an agreed price.
Ivanhoe has the right within 1 (one) year of the Second Earn-In or the announcement of a Measured and Indicated Resource estimate (as classified by the Australian JORC guidelines) in excess of 500,000 tonnes of contained copper to Claw-Back up to 30% by paying 4 (four) times the total Earn-In Expenditure incurred by Regal (“Claw-Back Price”). The Claw–Back Price shall be reduced on a pro-rata basis should a Claw-Back Shareholding Interest of less than 30% be acquired.
In the event Ivanhoe exercises its Claw Back Right, Ivanhoe will be required to contribute to exploration and development costs on a pro-rata basis.

Regal Resources managing director, David Young, said:

We are very excited about having signed this agreement with Ivanhoe after a lengthy process of
negotiation and documentation. Regal considers these Permits to have excellent potential for significant economic discoveries and they further strengthen the Company’s strategic position in the largest and most prolifically mineralized sediment-hosted copper province known on earth. It is also another demonstration of our commitment to develop the minerals potential of the region.
Regal will also be able to benefit from the very high standard of work already completed by the Ivanhoe
exploration team over parts of the JV area. The comprehensive technical database will allow the Company to take a focused approach to exploration, following up high priority targets that have the potential to support future growth of the Company while continuing to rapidly advances the Company’s flagship Kalongwe Project towards mine development.
Exploration costs should be reduced as Regal is already well established in the region and working with a team of geologists with excellent local knowledge of both the terrain and the geology.
We look forward to working in close collaboration with members of the Ivanhoe team who recently received a prestigious International Discovery Award for the Kamoa Copper deposit located just some 20km to the north of the permits.

Click here to read the Regal Resources Limited (ASX:RER) press release