Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Midnight Sun Mining and Rio Tinto have entered an “earn-in” joint venture in which the latter can own up to 75pc of the Solwezi Licences in the Zambia-Congo copper mining belt.


Midnight Sun will initially pay Rio Tinto $700,000, but the deal involves a subsequent work program and three additional stages that require Rio Tinto to fund $3mn for an exploration program in the Solwezi Licences area, which is part of Africa’s largest copper mining complex. Two-thirds of Rio Tinto’s commitment will be a firm commitment, followed by the miner paying Midnight Sun $300,000.


The first stage after completing the initial work program stipulates the mining giant can earn 51pc ownership in the Solwezi Licences by covering $16mn in work expenditures within four years and paying Midnight Sun $1mn. Stage two can allow Rio Tinto to earn another 14pc ownership by incurring $14mn in work expenditures or completing a feasibility study and making an additional $1mn payment to Midnight Sun.


Stage three has the potential for Rio Tinto to earn another 10pc ownership in Solwezi Licences provided it covers another $15mn in work expenditures within a couple of years.


The earn-in venture is still subject to a set of conditions and approval from the TSX Venture Exchange.

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