Red Hill Minerals funds Thomson exploration for $6M
Key points
- Red Hill Minerals signed a binding agreement to fund up to $6 million in exploration across Legacy Minerals' Thomson Project in New South Wales.
- Red Hill will sole-fund $2 million in Stage 1 and can spend an additional $4 million to earn 75% interest.
- The arrangement allows Legacy to advance Thomson with partner capital while focusing internal resources on its Mt Carrington Project.
Legacy Minerals (ASX:LGM) has entered a binding heads of agreement with Red Hill Minerals (ASX:RHI) to fund up to $6 million of exploration at its Thomson Project.
The new agreement replaces a previous arrangement, removing Legacy's buyback right over a 1.5% net smelter royalty held by Red Hill.
The transaction structure allocates initial exploration expenditure without requiring Legacy to deploy capital during the farm-in phase.
Under the terms, Red Hill will fund an initial $2 million programme over 12 months before deciding whether to spend another $4 million to secure a 75% stake.
Following the announcement, the Legacy Minerals share price was unchanged at $0.10, while the share price of Red Hill Minerals stood at $4.11.
The company stated that the partnership allows it to preserve capital and resources for its core Mt Carrington Gold-Silver Project.
Exploration work will focus on testing magnetic drill targets, following up on a historical intercept of 377m at 0.1 grammes per tonne gold.
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