Toro Energy (ASX: TOE) plans to farm-out up to 80% of all the mineral rights, except uranium, within its Browns Range tenements in the Northern Territory under a joint venture agreement with Northern Minerals (ASX: NTU).
The two companies have completed due diligence and as a result have now formalised the joint venture partnership.
The agreement allows for Northern to explore for non-uranium minerals on seven of Toro's wholly owned tenements in the Tanami region of the Northern Territory.
Northern intends to focus on heavy rare earth elements as part of its Browns Range project while Toro retains 100% of all uranium rights throughout the joint venture.
- The agreement allows Northern to earn up to an 80% interest in non-uranium minerals in the tenements over a five year period in various stages;
- In the first stage, Northern has agreed to spend $4 million on exploration over the first three years to earn a 51% interest;
- In the second stage, Northern has the option to increase its interest to 70% by spending an additional $2 million over the following two years; and
- Finally, Northern has the option to complete a Bankable or Definitive Feasibility Study and lift its equity position in non-uranium minerals to 80% if Toro chooses not to contribute.
Toro's tenements lie around the southern margin of the Browns Range Dome and, in particular, have substantial potential for unconformity style uranium.
Highlighting the prospectivity of the area, the single previous explorer, Japanese company PNC, identified a 20 kilometre long belt of geology that is directly analogous with that of the Alligator River Uranium Field, which hosts the Ranger and Jabiluka uranium deposits.
PNC created a sizable dataset that will enable Toro to fast-track its own uranium exploration in the area, which will also assist in the exploration for other commodities by the joint venture partners.
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