They've farmed out the Gambang tenement to Vale (2nd largest miner in the world after BHP) under an option deal which includes signifcant USD cash payments to RCO (of which they've already received one) and gives RCO a royalty over any production from this tenement. Deal also stipulates a minimum expenditure by Vale to test the prospects. Gambang is well known as a highly prospective area which has been subject to historical mining for gold/copper when metals prices were much lower. As far as I'm aware Oxiana took control of it many years ago but sat on it whilst they focused on Sepon. It was then vended into RCO in exchange for shares and has now been farmed out to Vale who have the financial and technical expertise to evaluate it to it's full potential.
If successful it would likely be a large long-life resource and provide many years of substantial royalties to RCO. Barry Fitzgerald from The Age has speculated as much as $12m year for 20+years at current prices - A real company maker!!
RCO Price at posting:
47.5¢ Sentiment: LT Buy Disclosure: Held
