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Valor Resources has scored mining heavyweight Rio Tinto as its partner for the Berenguela copper, silver and manganese project in Peru.

Investors loved the news, trading the hell out of the Perth-based minnow’s (ASX:VAL) shares, which drove the price up 67 per cent to an intra-day high of 0.5c.

Just before midday AEDT nearly 19 million shares had changed hands.

Valor needs a boost after its share price bottomed at 0.3c in late December even while 21.5 million shares were traded, prompting the ASX to issue a share price query over the fall.

The company revealed today that it has signed a joint venture option agreement with Rio subsidiary Kennecott Exploration Company.

The deal will give Valor the $US700,000 ($971,461) it needs to cover its next payment to SSR Mining, the previous owner of the Berenguela project.

Valor Resources (ASX:VAL) is desperate for a share price lift after hitting a 52-week low of 0.3c just before Christmas.
Valor Resources (ASX:VAL) is desperate for a share price lift after hitting a 52-week low of 0.3c just before Christmas.

Kennecott has also agreed to sink $US2m into exploration at the project over the next 12 months.

Once that money has been spent, Kennecott can choose to give Valor a further $US3m to become an equal partner in Berenguela.

Kennecott also has the option of taking its stake in the project to 75 per cent by solely contributing a further $US5m to the project within three years.

Valor chief Nick Lindsay told Stockhead the partnership meant the junior explorer could “have our cake and eat it too”.

“The project has a mineable resource already in place which can go into production,” he said.

“We’re in a pre-feasibility study for that, but it also could well be the tip of a much larger copper system, which is really Kennecott’s interest, and they have the technical capability to probe this thing a lot more — and the priority — than we do.

“It gives us an opportunity to participate in a much, much bigger copper project than we’d probably be able to do ourselves.”

Right now the Berenguela project hosts a resource of 45.9 million tonnes at 0.77 per cent copper, 86 grams per tonne silver, 0.28 per cent zinc and 5.1 per cent manganese.

Dr Lindsay said Rio Tinto was just one of several companies interested in the project.

“My predecessor Mark Sumner had talked to quite a few companies, and Rio Tinto has a presence in Peru,” he said.

“We had a number of companies coming through the property. This is a relatively high-grade system of some size. So [Rio Tinto] was always going to be interested in this.”