OZ Minerals Ltd. said Dec. 21 that it entered into a new earn-in agreement to secure up to a 70% interest in Red Metal Ltd.'s Punt Hill iron oxide-copper-gold project located near its Carrapateena copper-gold project in South Australia.

The company now holds over 4,400 square kilometers of licenses in the Carrapateena district, including a number of untested coincident gravity and magnetic anomalies at Punt Hill.

"The prospects at Punt Hill have a number of geophysical similarities to the deposits at Carrapateena, containing a magnetic anomaly within a larger strong gravity response, a common feature of breccia complexes," Managing Director and CEO Andrew Cole said.

OZ Minerals can earn a 51% stake by spending A$4 million on exploration activity within 18 months, and it can earn up to 70% equity by spending a further A$5 million within the following two years.

The company will fund 6,000 meters of drilling in the second half of 2018 to test six targets, at an estimated cost of A$2.4 million.

Red Metal's subsequent share of expenditure up until a decision to mine will be funded by OZ Minerals. The expenditure will be treated as a loan at 2% plus London Interbank Offered Rate and will be repaid from Red Metal's share of future production.

OZ Minerals recently awarded a A$312 million contract to Downer EDI and its joint venture partner Ausenco for work on the company's Carrapateena project.