Minotaur Exploration (ASX:MEP) has got OZ Minerals (ASX:OZL) on its side with a new binding deal that will see the much larger copper producer “loan carry” the junior through to production.

OZ Minerals has agreed to fund Minotaur’s share of the development of the Jericho copper project, part of the pair’s Eloise joint venture project.

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The $3 billion miner has already earnt a 70 per cent stake in the Eloise project, but with this latest deal can increase its share of the Jericho project to 80 per cent.

The loan carry arrangement covers all drilling, scoping, feasibility studies, mine development and construction funding, which Minotaur said is currently an indeterminate amount but potentially would amount to “many millions of dollars”.

“Minotaur’s board considers the loan carry arrangement over the Jericho project is, at this early pre-resource stage, a highly attractive route for the company as Minotaur is relieved of all expenditure for its share of Jericho from now until mine cash flow eventuates,” managing director Andrew Woskett told investors today.

“Moreover, Minotaur avoids highly dilutive equity funding to finance its share of the project.”

The loan is repayable from future cash flows from the Jericho mine.

The pair expect the Jericho deal to be cemented in the next two months.

S&P Global Market Intelligence revealed recently that major new copper discoveries are at decade-long lows and if the industry doesn’t get cracking, there could be a massive shortage in the next 15 to 20 years.

While this particular situation won’t affect near-term supply, the industry needs to start finding new mines now to deal with the shortfall expected in the next one to two decades.

READ: S&P confirms – the world is struggling to find more copper


In other base metals news:

Metals X (ASX:MLX) has unearthed more high grade tin at its operating Renison tin mine in Tasmania. Drilling at the Bell 50 target has returned high-grade hits of 10.3m at 7.65 per cent tin from 259m and 3.7m at 6.78 per cent tin from 223.2m. Metals X says this means it provides the potential for a 200m down-plunge extension of the high-grade Area 5 target.

Drilling by Pioneer Resources (ASX:PIO) at its Leo’s Dam nickel sulphide target in Western Australia has confirmed the company’s view that it has a 1km-long priority target on its hands. The program comprised 4142m of drilling across 60 holes and followed up the 2018 discovery hole that delivered grades of 1.02 per cent nickel and 475 parts per million copper.

Peel Mining (ASX:PEX) and CBH Resources are seeking approval from the New South Wales government to develop an exploration decline down to 300m at their Mallee Bull copper project. The decline will allow the two companies to undertake exploration drilling in the deeper portions of the deposit, as well as to obtain a bulk sample from the Silver Ray zinc, lead and silver target for processing at CBH’s Endeavor mine.