Xstrata Copper and Red Metal have entered into an exploration agreement with each other for a copper, gold and silver project.
The Corkwood project owned by Red Metal is situated in the Cloncurry region of Queensland in Australia. Red Metals has a strategy of targeting large ore deposits in Australia and then getting the attention of potential partners.
As per the terms of the agreement an active drill intensive field program will be carried out on the property costing about $600,000 a year for the first year and $2 million per year during the sole funding period. Xstrata has set a budget for around $780,000 approximately for this joint venture during its first year. They have also given a commitment to initiate a follow up drilling program in the Jimmy Creek discovery before 31 May 2011.
The agreement was a consequence of Red Metal reporting that a broad 153 meter interval of mineralized breccias that averaged 0.6% copper was found during its recent drilling at the Jimmy Creek region. The terms give Xstrata 51% of the Corkwood group of tenements by spending $5.5 million on exploration over four years.