Rockcliff Copper Corp. said Sept. 29 that it entered an option agreement dated Sept. 20 pursuant to which it can earn up to a 100% interest in the Bur property in Manitoba, which is owned by a HudBay Minerals Inc. subsidiary.
The Bur property, which is said to host a high-grade, zinc-rich volcanogenic massive sulfide deposit, is owned by Hudson Bay Mining and Smelting Co. Ltd. It forms part of HudBay's Flin Flon Regional property and is located near HudBay's Snow Lake gold property.
Under the agreement, Rockcliff can earn a 100% interest in the Bur property by spending C$3.0 million on exploration over a four-year period in increasing annual increments, starting with C$400,000 in the first year.
Once the earn-in is complete, Rockcliff may exercise its option to acquire a 100% interest in the property. Upon exercise of the option, HudBay will receive a 2% net smelter return on the Bur property and will then have one year to buy back a 70% interest in the property for a total of C$3.0 million cash over a three-year period.
In addition, HudBay will pay double the exploration expenditures incurred by Rockcliff during the buy-back waiting period, capped at C$1.5 million. Upon exercise of the option to buy back the stake, HudBay's NSR right will also terminate.
HudBay and Rockcliff will then form a 70/30 joint venture and will be responsible for their respective pro rata share on further exploration of the property.
Should the companies decide to develop a mine at Bur, Hudbay will contribute Rockcliff's proportionate share of expenses in the form of a non-interest bearing loan, repayable in line with the terms of the joint venture agreement.