Australian mining company South32’s subsidiary (South32) has signed an earn-in deal with Ridgeline Minerals to acquire up to an 80% interest in the latter’s Selena project in Nevada, US.
The deal is pending approval from the TSX Venture Exchange.
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South32’s potential stake is contingent upon funding exploration expenditures and making cash payments over a specified term.
To earn an initial 60% interest, South32 must provide Ridgeline with a $100,000 execution payment and commit to a minimum of $10m in exploration expenditures over five years.
This includes a guaranteed $2m within the first two years and an additional $500,000 cash payment by the fifth anniversary.
Ridgeline will continue to operate the project during this phase and will receive a 10% management fee on qualifying expenses.
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By GlobalDataThe agreement outlines a technical steering committee with representatives from both companies to oversee the exploration progress.
If the first option is exercised, the Australian company will acquire a 60% interest through equity in the entity holding the Selena project.
A second phase allows South32 to increase its stake to 80% by funding another $10m over three years, with the option to assume project operatorship.
Should South32 decide to pursue the second phase, it has to arrange a debt facility for Ridgeline to fund its share of mine development costs.
Ridgeline president, CEO and director Chad Peters said: “We strongly believe that Selena represents a significant exploration opportunity in the base metal sector and South32 is the ideal partner to help us quickly advance and de-risk our high-grade CRD discovery at Selena.
“Ridgeline’s combined earn-in agreements between South32 and Nevada Gold Mines now provide up to $60 million in potential exploration expenditures across the Selena, Swift and Black Ridge projects.
“Furthermore, all three earn-in agreements retain non-dilutive, debt financing options that will effectively carry Ridgeline’s 20% to 25% interests in the respective projects should they proceed to production.
“Ridgeline’s portfolio now offers a compelling mix of leveraged discovery potential through our three partner projects, as well as 100%-owned upside through our exploration pipeline of projects, led by our flagship porphyry copper project at Big Blue.”
In May 2024, South32 signed an earn-in deal with Hammer Metals for a stake in the Isa Valley project in Queensland.
