Rox Resources Ltd. entered into binding term sheet for an option to secure a 75% interest in Cullen Resources Ltd.'s 290-square-kilometer Mt Eureka gold-nickel project adjacent to its Fisher East nickel project in Western Australia.
During the first earn-in stage, the company can earn a 51% interest in the project by spending A$1 million on exploration over a three-year period from the satisfaction of one of the precedent conditions, upon which it will pay A$40,000 to Cullen.
Once it has earned the initial 51% stake, Rox can elect to earn a further 24% interest by spending another A$1 million on exploration over another three years starting at the end of the first stage.
Upon earning a 75% interest in the project, the two parties will form a joint venture that will include certain Rox tenements.
After the second stage, Cullen's 25% interest will be free carried until completion of a pre-feasibility study, following which it will either have to contribute to joint venture costs on a pro rata basis or dilute.
If any of the party's interest falls to 10% or below, it will be converted to a net smelter royalty of 1% on those Cullen tenements that are already subject to a royalty and 2.5% on the rest of the joint venture tenements.
The company said Aug. 21 that it can only withdraw after spending a minimum of A$333,334 and ensuring the Cullen tenements are in good standing.
In April, Rox agreed with Venus Metals Corp. Ltd. to jointly acquire a 90% interest in the Currans Find and Pinchers gold properties in Western Australia.
