Australian mining companies AusQuest and South32 have agreed to extend their existing strategic alliance agreement (SAA) for two more years, until 31 December 2025.

Originally entered in February 2017, the SAA included a framework under which AusQuest could use its knowledge to target new deposits that were offered exclusively to South32.

The two companies are said to have since developed a relationship and plan to continue working together to develop a pipeline of exploration opportunities with a focus on Australia.

The commodities that are targeted under the partnership include copper, lead, zinc and nickel with potential for gold, and silver.

They may also consider other commodities such as lithium and rare earths.

As per the agreement, AusQuest will secure projects and offer them to South32.

These projects will undergo staged evaluation process, where they will be classified either as exploration opportunities or drill-ready opportunities.

For exploration opportunities, South32 will fund the work programmes to bring the project to a drill-ready stage.

This funding will amount to a maximum of $4.5m and also create an earn-in opportunity for South32 to acquire a 70% interest in the project.

Under a drill-ready opportunity, South32 can directly choose to earn a 70% stake in the project. AusQuest will have to prepare a drill programme and budget of at least $500,000.

As per the SAA, a joint venture (JV) can be formed or a JV agreement can be entered into, for the project.

If South32 rejects a property twice, in either of the two stages, it will no longer be subject to the SAA.

“This is a great outcome for our shareholders with South32 continuing to back the AusQuest team for a further two years under the strategic alliance, which has functioned extremely well since its inception in February 2017. The agreement is structured to enable AusQuest to keep identifying opportunities, as well as rewarding the company for success along the way," said AusQuest managing director Graeme Drew.

“The extension of the SAA is a strong endorsement of AusQuest’s credentials and technical skills and is a vindication of the quality and scale of the projects we have been able to consistently bring to the table over the past seven years.

“We continue to be excited about the future and look forward to continuing to work closely with South32 to build a quality pipeline of exploration opportunities which we hope will deliver significant benefits for both companies, and in particular, to reward our shareholders for their patience and ongoing support.”