Key terms of the JV agreementStage one – RTX earns 51%...

Key terms of the JV agreement

Stage one – RTX earns 51% interest:

• RTX must pay West Wits $150,000 up-front;
• RTX has a sole and exclusive right to earn an initial 51% joint venture interest in the tenement by sole funding exploration expenditure of A$4 million within four years after the agreement's execution date; and
• RTX commits undertaking to sole fund a minimum of 800 metres of diamond core and/or reverse circulation drilling on the tenement before December 31, 2022; subject to no events of force majeure, including land access delays where RTX has made demonstrable reasonable efforts to obtain land access in an expeditious manner.

Stage two – RTX earns an additional 29% interest (80% total RTX interest):

• Once RTX has earned a 51% interest in the tenement, a joint venture will be formed;
• After obtaining the initial 51% interest, RTX has the right to sole fund a further A$6 million of exploration expenditure within three years of the joint venture formation date to earn an additional 29% interest in the joint venture;
• If RTX makes the stage two sole fund election, RTX must pay West Wits a further $250,000;
• Once the joint venture is formed and, following either RTX earning an extra 29% interest through the achievement of the sole funding milestones or RTX not making the stage two sole fund election, either party may elect to contribute to joint venture expenditure proportionate to its interest or have its interest diluted; and
• If either party’s interest falls below 10% (being a diluting party), then the other party has a right to buy out the joint venture interest of the diluting party at fair market value (as agreed between parties or by independent valuers) or the diluting party is deemed to have converted its interest into a 1.0% net smelter royalty payable on the first eight years of commercial production.

Moral- Don’t get too excited about Mt Celia yet. For $400k to west wits coffers, RIO gets 80% stake in the project (provided they spend $10m on the project). Far fetched from the millions being dreamt off.