Mining giant Rio Tinto (RIO) raised eyebrows yesterday by revealing plans to invest up to $60 million on exploration in a WA project held by tiny would-be miner, Antipa Minerals (AZY).
Under the farm-in agreement between the two companies, Rio will progressively increase its stake in the joint venture covering the Citadel gold and copper project in Western Australia to a maximum of 75%.
The Citadel project is located 75 kilometres north of gold miner Newcrest Mining’s Telfer mine in WA’s Paterson province in the Great Sandy Desert.
The deal raised eyebrows because of the relative difference in size between the $4 million market value midget in Antipa, and the multi-billion dollar valued Rio.
News of the deal sparked a massive 21% surge in its share price to a whole 2.5 cents on the ASX yesterday. Rio shares eased half a per cent to $54.81.
AZY 1Y – Antipa spikes on Rio deal
The deal is one of the first by Rio since it made an open invitation in August to more than 500 ASX junior explorers to present their exploration projects for possible joint venture deals. Media reports say legendary WA prospector Mark Creasy has a 2% stake in Antipa.
Antipa listed in 2011 and last week went into a trading halt pending an announcement on the joint venture deal with Rio and completion of a small capital raising.
There will be an initial $3 million expenditure commitment over 18 months by Rio at the Citadel project, with Antipa to manage a first stage program involving survey work and drilling, to start in the first half of next year. Rio can then elect to proceed further or withdraw from the joint venture.
