Alloy signs gold and copper deal with heavyweight Rio Tinto; shares jump 14pc
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Mining giant Rio Tinto has agreed to partner up with Alloy Resources in a West Australian gold and copper project.
The pair struck a deal that gives Rio Tinto (ASX:RIO) the right to earn up to 70 per cent of an Alloy (ASX:AYR) project called “Telfer” by spending $500,000 and drilling 500m within three years.
Investors welcomed the news, pushing shares up 14.3 per cent to 0.8c on Tuesday morning.
Alloy’s landholding is located north-west of Newcrest Mining’s (ASX:NCM) 32-million-ounce Telfer gold mine in the Paterson region.
Rio Tinto has been exploring in the Paterson region since 2015 and Alloy hopes the major’s knowledge of the area can fast track the definition of gold and copper mineralisation.
The major has a large landholding that abuts Alloy’s Telfer project and is also a partner in a project with another ASX-listed junior explorer, Antipa Minerals (ASX:AZY).
“The area has some historic first pass copper and gold drill results of interest; however this was from back in the 1990s and we will now benefit from modern exploration techniques and geological models” Alloy chairman Andy Viner told investors.
Alloy has been contacted for comment.