Here are the terms - direct quotation from the announcement: “In the event Avanco discovers a copper resource with potential to support the production of 80,000 tones per annum of copper metal for a life-of-mine greater than 8 years, Xstrata can exercise the right to “back-in” up to 70% (this excludes pre-existing Rio Verde and Serra Verde tenure).
On exercising the “back-in”, Xstrata and Avanco will form a joint venture company on a 70%-30% equity basis respectively.
As part of the back-in conditions, Xstrata will, reimburse the Company two times value of exploration expenditures and offer a favorable financing facility to assist Avanco in funding its contribution to project development capital.
Should the back-in not occur, Xstrata Copper will be entitled to a 0.5% NSR production royalty from Avanco.
A 1.5% NSR copper production royalty is payable to a former owner.”
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