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Valor Resources and Rio Subsidiary Join Forces on Berenguela
Rio Tinto subsidiary Kennecott Exploration Company has signed a joint venture agreement with Valor Resources for the Berenguela project.
Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) subsidiary Kennecott Exploration Company has signed a joint venture (JV) agreement with Valor Resources (ASX:VAL) for the Berenguela copper-silver–manganese project in Peru.
Valor acquired Berenguela from SSR Mining (TSX:SSRM,NASDAQ:SSRM) in May 2017, and spent much of that year drilling at the project and establishing an updated resource estimate.
The new JV deal entails Kennecott paying US$700,000 to SSR by the end of January as the latter company still owns a mortgage over the project.
Kennecott is also expected to spend US$2 million on exploration over the next year. Upon doing so, the company will have the option to form a 50/50 JV with Valor for Berenguela in exchange for an additional US$3-million payment to Valor.
Should Kennecott exercise that option, the company can put an extra $5 million into Berenguela to earn a further 25-percent stake in the JV.
Going forward, future milestone payments meant for SSR will be shared by JV participants on an equity basis if the 50/50 JV option is exercised.
While Berenguela is currently undeveloped, Valor says it believes adding Kennecott as a partner to the project will help “endorse its current value.”
“This is a very exciting time for Valor Resources and the undeveloped Berenguela copper-silver project. We welcome [Kennecott’s] involvement in the project’s development going forward and we are encouraged about the exciting near and longer term prospects for [Valor’s] shareholders,” Valor Executive Director Nicholas Lindsay said in a statement.
The project currently has a measured, indicated and inferred resource of 45.9 million tonnes at 0.77-percent copper, 86 grams per tonne silver, 0.28-percent zinc and 5.1-percent manganese.
Berenguela contains over 6,500 hectares of mineral concessions, with the current resource only making up 2.1 percent of the project’s total land package.
A prefeasibility study is currently underway, with a metallurgical testwork program also ongoing.
Alongside Berenguela, under Valor’s belt is its Picha project, a copper-silver exploration asset also located in Peru with a 3,000-hectare exploration concession.
Valor’s share price surged on the news of the JV, growing 33.33 percent on Monday (January 14) and closing the trading day on the ASX at AU$0.004.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.
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A graduate of Durham College's broadcast journalism program, Olivia has a passion for all things newsworthy. She got her start writing about esports (competitive video games), where she specialized in professional Call of Duty coverage. Since then, Olivia has transitioned into business writing for INN where her beats have included Australian mining and base metals.
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