Australia’s Golden Rim Resources (ASX: GMR) has executed an option and joint venture agreement with Teck Resources (TSX: TECK.A | TECK.B) (NYSE: TECK), Canada’s largest diversified miner, to develop the Loreto copper project in Chile.
The asset is located 120 km north of Teck’s Quebrada Blanca, the miner’s main growth project, and it is surrounded by operations run by BHP and Codelco, two of the world’s largest mining companies, Golden Rim said.
The deal grants Teck’s subsidiary Teck Chile options to earn up to a 75% interest in Loreto by providing Golden Rim with US$600,000 in staged cash payments. The Vancouver-based miner will also have to spend US$17 million on exploration.
“Golden Rim believes that Loreto could well represent the last unexplored outcropping Oligocene-Eocene porphyry system in northern Chile,” managing director Craig Mackay said in the statement.
The company noted that mineral concessions at its adjacent Paguanta project are not included in the agreement, adding it was pursuing an alternative deal for this asset.
Teck is currently expanding its Quebrada Blanca mine in Chile. The project, dubbed Quebrada Blanca Phase 2 (QB2), is slated to begin operations in the second half of the year, doubling the company’s copper production by 2023.
The company recently flagged costs at the almost-finished expansion could rise by up to US$500 million to between US$900 million and US$1.1 billion.
The project will allow Teck to extend the aging mine’s life by 28 years and substantially boost production to 300,000 tonnes of copper a year from 23,400 tonnes in 2017. The mining giant is already studying a Phase 3, which will double Quebrada Blanca’s capacity to 600,000 tonnes of copper a year. The potential extension will make the mine Chile’s second-largest copper operation, after Escondida. It will also situate it among the world’s top five copper mines.
This article was originally posted on www.Mining.com