The agreement covers the lake surface within four primarily uranium prospective Exploration Licenses (E80/3484, 3485, 3486 and 3519) covering 420 square kilometres in Western Australia.
Toro will retain all other mineral rights, including uranium.
Toro's previous shallow drilling has confirmed the presence of brine in the lake subsurface, with potassium, magnesium and sulphur concentrations similar to other potash brine systems in central Australia and overseas.
Managing director Dr Vanessa Guthrie said the agreement would allow the exploration momentum to be continued at Lake Mackay in a manner which provided some capital efficiency to Toro over the tenements.
This is consistent with Toro's strategy of developing a pipeline of highly prospective uranium exploration tenements to support the company's growth strategy.
Rum plans to drill deeper to assess the potential for a sustainable potash resource and will spend a minimum of $250,000 in Year 1 on drilling to earn a 51% interest in the rights.
Toro can then elect to contribute pro rata to further exploration or have Rum spend a further $750,000 in Years 2 and 3 to increase its interest to 80%.
At this point, Toro can elect to maintain its 20% interest and contribute to further expenditure.
If either party dilutes below 5%, their interest will be converted to a 2% royalty.
The Lake Mackay Potash Rights are located together with Toro's Theseus Uranium Prospect, which has an Inferred Resource of 6.3 million tonnes at 493ppm U3O8 for 6.9 million pounds of U3O8 using a 200ppm cut-off.
This was achieved despite limited drilling, and wide drillhole spacing to ascertain mineralisation extent.
Toro had $10.1 million in cash as of 31 March 2013.
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