Publish Date : 06-Mar-2014
Rose Petroleum plc, the AIM-listed natural resources company, is pleased to announce that its wholly-owned subsidiary AVEN Associates LLC ("AVEN") has entered into a joint venture agreement (the "JV" or "Agreement") with TSX-listed Lowell Copper Ltd. ("LCL" or "Lowell Copper") in connection with AVEN's TC porphyry copper project in the State of New Mexico, USA (the "TC Project"). The project was developed out of AVEN's porphyry copper Covered Area Program ("CAP").
Highlights:
LCL to spend US$250,000 to fund initial exploration phase for 25% stake
LCL will have an option to increase its interest to 51% by funding additional US$2,500,000
At 51%, LCL will have an option to increase to 70% by investing US$3,500,000
Term of the JV is four years
After completion of the initial exploration phase LCL will have an option to increase its interest to 51% by funding the next US$2,500,000 of the exploration programme and a further option to increase to a 70% interest by investing an additional US$3,500,000 at which point LCL's total investment in the JV will be US$6,250,000.
Should LCL elect to limit its investment to a 51% interest, then AVEN and LCL would fund the programme according to their percentage interests or be diluted according to standard dilution terms with LCL being credited with 51% valued at US$2,750,000 and AVEN 49% at US$2,642,000 as the starting point for dilution. Should either party drop below a 10% interest that interest reverts to a 1% free-carry.
The term of the JV is four years or until the exploration programme is completed under mutual agreement. The TC Project's area of interest covers approximately 25 sq. miles (64 sq. km).
The TC Project is located in New Mexico along the well-known Hillsboro-Chino-Tyrone-Lordsburg-Bisbee porphyry copper belt. The project is a CAP target with porphyry copper-style characteristics including quartz veins, propyllitic and argillic alteration and base and precious metals mineralisation identified in outcrop along the margins of the covered terrain. Sampling by AVEN of altered and mineralized rock has returned assay values up to 3,896 ppm Cu, 84 ppm Mo, 4,876 ppm Pb, 1,997 ppm Zn, 24 g/t Au, and 204 g/t Ag.
Permitting for the drilling programme is underway with drilling planned to commence in the second or third quarter of this year assuming no permitting delays.
Matthew Idiens, CEO, said, "We are very much looking forward to working with LCL and its Chairman and CEO, David Lowell in relation to the development of this asset. We could not have found a better partner to support and fund the TC Project. The funding covers the direct exploration, salaries and overhead of the copper team as a standalone venture from Rose's growing oil and gas activities.
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