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- DiscovEx Resources (DCX) executes two binding option agreements with Rio Tinto Exploration, a wholly-owned subsidiary of Rio Tinto (RIO)
- Both deals allow Rio Tinto to explore and investigate potential development opportunities for iron ore within the Sylvania project and the Spearhole detrital iron ore deposit
- The potential total consideration of the agreements is valued up to $9.3 million, includes option extension fees and option exercise payments, plus a royalty on future production
- DCX shares have ended the day up 14.3 per cent, trading at 0.8 cents
DiscovEx Resources (DCX) has executed two binding option agreements with Rio Tinto Exploration, a wholly-owned subsidiary of Rio Tinto (RIO).
Both agreements give Rio the option to acquire 100 per cent of the iron ore rights at four tenements held within the Sylvania project.
The Sylvania project is located approximately 15 kilometres southwest of Newman, Western Australia.
Both options agreements will allow Rio Tinto to explore and investigate potential development opportunities within the tenements, inclusive of the Spearhole detrital iron ore deposit.
The potential total consideration of the agreements is valued up to $9.3 million which includes option extension fees and option exercise payments, plus a royalty on future production.
The first agreement covering the Spearhole detrital iron ore deposit includes a $67,500 option payment for a two-year initial period with option extension fees of $180,000 and $225,000 per year for an additional two-year option period.
Upon exercise of the option, a free on board (FOB) royalty of 0.9 per cent to be paid for the first 20 years of production.
The second agreement covers the broader Sylvania exploration area which tenements are wholly-owned by Lighthouse Resource Holdings, a DiscovEx subsidiary.
Key terms of the second agreement include an option payment of $50,000 for a two-year initial option period and option extension fees of $50,00 per year for an additional four-year option period.
Managing Director Toby Wellman believes that Rio Tinto’s interest at Sylvania “speaks volumes about the quality of the tenement package” the company has built over the last two years.
“Not only is this an opportunity for DCX to monetise the iron ore assets held within the project, but we also see the advantages of data sharing with Rio to progress our main focus, that being the discovery of gold and base metals resources.”
DiscovEx confirms that Rio Tinto is acquiring the iron ore rights only and ownership of all other minerals remain unaffected by the options agreements.
DCX shares have ended the day up 14.3 per cent, trading at 0.8 cents at market close.
