Minotaur Exploration Ltd. and OZ Minerals Ltd.'s Cloncurry Alliance said Feb. 18 that it has formed the Breena Plains joint venture with Sandfire Resources Ltd.
The joint venture incorporates some 1,226 square kilometers of tenure immediately surrounding the existing joint venture assets, prospective for Cannington-style and Eloise-style polymetallic base metals systems in Queensland, Australia.
The Cloncurry Alliance is a strategic collaboration deal which seeks regional opportunities for Cloncurry conducive to the creation of a minerals hub leveraging other assets held in joint venture between the involved parties, including the Eloise and Jericho joint ventures.
According to Minotaur, the new joint venture with Sandfire provides significant impetus to the hub concept.
Under the Breena Plains joint venture agreement, the alliance should spend A$1 million in exploration during the first year, after which it could earn an initial 51% tenement interest over Sandfire's tenement group by sole funding a further A$3 million through the next two years.
The alliance could move toward earning an additional 24% stake by spending a further A$4 million over the subsequent two years, then to attain a maximum stake of 75% over five years, the alliance must invest A$8 million.
Minotaur said that it is expecting a payment of A$225,000 from OZ for securing the Breena Plains joint venture.
OZ Minerals is set to contribute all required exploration expenses of up to A$4 million over three years, which will entitle the alliance to a 51% stake in the project, with OZ owning 36% and Minotaur owning 15%.
Subsequently, the alliance may contribute A$4 million on a 70/30 basis over two years to gain a 75% stake in the project, with OZ owning 52.5%, Minotaur owning 22.5%, and the rest held by Sandfire, or Minotaur may choose to dilute its share to 20% and convert to a loan carry arrangement similar to that in place for the Jericho joint venture.