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Exploration and development company Bluejay Mining’s share price surged 20% on the London exchange on Tuesday, as the company announced a joint venture and earn-in agreement with Rio Tinto at Enonkoski project, in Finland.

In terms of the agreement, Rio Tinto could earn up to a 75% interest, in stages, in the project by sole funding $20-million in project expenditures, or cash equivalent payments, over three stages.

“We are delighted to have signed this Agreement with Rio Tinto and look forward to a successful partnership as we jointly assess the Enonkoski nickel belt. This belt has demonstrable nickel occurrences and past production and it’s a testament to the project that we have attracted a blue-chip miner at Enonkoski,” said Bluejay CEO Rod McIllree.

Bluejay’s wholly owned subsidiary, FinnAust Mining Finland Oy (FinnAust), is currently one of the largest licence holders in east Finland. It is the current 100% owner of a range of brownfield exploration licences that generally surround historical mines including the Hammaslahti copper mine, the Outokumpu copper mines and the Enonkoski nickel belt which hosts the Enonkoski project.

Enonkoski covers more than 2 300 ha over mafic – ultramafic rocks between and along more than 15 km of strike from the historical Enonkoski and Hälvälä mines operated by Finnish State-owned mining company Outokumpu. The area is prospective for nickel, copper, cobalt and platinum group elements.

The Enonkoski mine previously produced 6.7-million tonnes at an average grade of 0.8% nickel between 1984 and 1994 with historic intercepts of the massive ore in the mine including 32.90 m at 4.09% nickel, 0.56% copper, 0.17% cobalt and 19.70 m at 6.12% nickel, 1.94% copper and 0.29% cobalt.

Bluejay also announced that, as part of a proposed JV agreement, it would pay consideration of £100 000 in cash and £100 000 payable in shares to Magnus Minerals to settle historical royalty arrangements to ensure that all future royalty arrangements were clear and without encumbrance on its Enonkoski nickel project and elsewhere within its Finnish portfolio.

A fee of £100 000 is payable in new ordinary shares to Magnus based on the prior 30-day volume weighted average share price from the date the royalty resolution was signed. As such, it is proposed to issue 1 060 063 shares at a price of £0.09433.

The company will also issue new ordinary shares to certain employees, as a bonus, based on the same 30-day volume weighted average share price.