rio tinto letter of agreement

Watraba and Murat Projects (Red Metal 100 %, RTE earning 60%)
Red Metal is pleased to announce that it has entered into a Letter Agreement with Rio Tinto Exploration Pty Limited, to explore and develop heavy mineral sands on the Watraba and Murat Bay tenements located along the eastern margin of the Eucla Basin, South Australia.
The Watraba Letter Agreement provides that Rio Tinto can earn a 60% interest in the tenements by sole funding the completion of a bankable feasibility study and making a positive decision to mine within five years. If required, Rio Tinto can defer the decision to mine for up to two years. Rio Tinto is one of the largest producers of mineral sands in the world and their financial strength, mining and marketing expertise will be particularly advantageous to Red Metal.
The Watraba and Murat Bay tenements cover a highly prospective headland beach setting along an old, Tertiary, beach line where Iluka Resources Limited recently discovered four significant zircon rich heavy mineral sand resources, Jacinth, Ambrosia, Tripitaka and Gulliver (Figure 1). Rio Tinto Exploration Pty Limited will fund a minimum of $300,000 on exploration by Red Metal on the tenements over the next 4 months. Drilling has commenced in accordance with the Letter Agreement.