McEwen Copper Inc., a subsidiary of McEwen Mining Inc. has announced it has entered into a binding term sheet with Kennecott Exploration Company (“KEX”), a subsidiary of Rio Tinto, for an option to earn a 60% interest in and joint venture the Elder Creek property in Nevada (see Figure 1) by spending US$18 million.
The principal terms of the agreement are:
- KEX will have the right to earn a 60% interest in Elder Creek by investing $18 million over a maximum of seven years (the “Expenditure Commitment”).
- KEX will be the operator of the Elder Creek project during the term of the agreement.
- Following completion of the Expenditure Commitment, KEX and McEwen Copper will form an unincorporated 60:40 joint venture.
- Other customary representations, warranties and conditions.