Rio Tinto Exploration has signed a farm-in agreement with Antipa Minerals to acquire up to a 75% interest in Antipa’s Citadel project in northern Western Australia. The agreement calls for four stages of development, which, if fully realized, would involve total expenditures of $60 million by Rio Tinto Exploration, which is a wholly owned subsidiary of Rio Tinto Plc.

The Citadel project consists of four exploration licenses covering an area of approximately 1,111 km2 of prospective stratigraphy. The Magnum gold-copper deposit and the Calibre gold-copper-tungsten deposit have been identified within the project area.

During Stage 1 of the farm-in, Rio Tinto will fund $3 million in exploration on the Citadel tenements within 18 months of the execution of the agreement. Antipa will be the operator during this 18-month period, which will include an $800,000, 5,000-m follow-up reverse circulation drilling program on the Calibre deposit. Phase 1 work will also include an induced polarization (IPorientation survey at Calibre and IP surveying of additional selected target areas, with follow-up drilling of anomalous IP areas generated.

Assuming election to proceed to Stage 2, Rio Tinto will sole fund a further $8 million in exploration on the Citadel tenements within three years to earn a 51% interest in the project, and Rio Tinto will take over as project operator.

Assuming completion of Stages 1 and 2, a joint venture will be formed between Rio Tinto and Antipa, with respective joint-venture interests of 51% and 49%. Rio Tinto may elect to continue to sole fund project expenditures to increase its interest to 65%; or it may elect to remain at 51%, and the parties will thereafter contribute to joint-venture expenditure in accordance with their respective interests.

To gain its 65% interest, Rio Tinto must sole fund a further $14 million in project expenditures within three years.

If Rio Tinto elects to proceed to Stage 4, it must sole fund a further $35 million in Citadel project expenditures within three years to earn a 75% joint-venture interest in the project.


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