The project consists of six mineral licences and 189 mineral claims. Credit: A Dharma Prasetya/Shutterstock.

Canadian exploration company York Harbour Metals has granted Australia-based Firetail Resources an option to earn up to an 80% interest in the York Harbour Copper-Zinc-Silver Project.

Located in Newfoundland and Labrador, the project consists of six mineral licences and 189 mineral claims, spanning 4,725 hectares.

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The agreement is subject to a 0.5% net smelter royalty (NSR) already in place and an additional 2% NSR to be granted to York Harbour by Firetail.

Completion of the deal is subject to obtaining all necessary approvals including the TSX Venture Exchange’s nod, alongside customary closing conditions.

Firetail has already paid a A$100,000 exclusivity fee and can exercise the option over three years.

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The total consideration includes A$500,000, 175 million ordinary shares of Firetail and a commitment to complete 10km of drilling at the York Harbour Project.

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Upon acquiring a minimum stake of 49% in the project, Firetail will grant the York Harbour NSR to the company.

During the option period, Firetail will be required to maintain the project in good standing, which involves fulfilling all necessary work and payments.

A joint venture will be established upon Firetail fully exercising the option, or after acquiring a minimum 49% interest.

If Firetail secures an 80% interest, York Harbour will receive a free carried interest until a pre-feasibility study is delivered.

Otherwise, both parties will bear their pro-rata share of future expenditures, with York Harbour’s interest not falling below 20%.

Should York Harbour’s stake reduce to 20%, it will gain a free carried interest until Firetail has completed the required payments and pre-feasibility study.

York Harbour will initially operate the project unless its interest dips below 50%.