Eurasian Minerals Options Arizona Copper Project to Kennecott Exploration
Royalty and prospect generator Eurasian Minerals kicked off the week by announcing it has optioned its Superior West copper project in Arizona to Kennecott Exploration. Kennecott is owned by Rio Tinto, which also owns the massive Resolution copper project in Arizona in partnership with BHP Billiton.
Royalty and prospect generator Eurasian Minerals (TSXV:EMX) kicked off the week by announcing it has optioned it's Superior West copper project in Arizona to Kennecott Exploration. Kennecott is owned by Rio Tinto (NYSE: RIO,ASX:RIO,LSE:RIO), which also owns the massive Resolution copper project in Arizona in partnership with BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT). That project is located less than 2 kilometers away from Superior West. Under the terms of the agreement between Kennecott and Eurasian's subsidiary, Bronco Creek Exploration, Kennecott may earn a 100-percent interest in Superior West for a cash payment of US$149,187 and exploration expenditures of US$5.5 million. Kennecott must also make annual option payments amounting to US$1 million before the fifth anniversary of the agreement, plus milestone payments when a preliminary economic assessment (US$500,000), prefeasibility study (US$1 million) and feasibility study (US$2.5 million) are completed and annual advanced minimum royalty (AMR) payments beginning on the first anniversary of the exercise of the option. Eurasian Minerals will keep a 2-percent net smelter royalty on Superior West once Kennecott exercises its option, although Kennecott can buy down 1 percent of the royalty on 14 of the project's 680 claims, or may extinguish the need for AMR payments for a one-time payment of US$4 million. Overall, the news doesn't appear to have garnered much of a reaction from the market. Eurasian's stock was down about 5 percent on Monday to close at $0.74, with just 500 shares trading hands. Still, the interest in Superior West from Rio is an interesting development. As mentioned above, the project is less than 2 kilometers away from Rio and BHP's Resolution copper project, which is set to produce as much as 1 billion pounds of copper per year.