Rio Tinto, Calibre enter Nicaragua exploration deal

Calibre Mining’s El Limon ball mill in Nicaragua. Credit: Calibre Mining

Rio Tinto Exploration has entered into an option agreement with Calibre Mining (TSX: CXB), pursuant to which Rio Tinto can earn up to a 75% interest in Calibre’s Borosi project in northeast Nicaragua.

The Borosi project hosts both gold-silver and copper-gold resources in two areas, as well as multiple lesser explored copper-gold skarns, low-sulphidation epithermal gold-silver vein systems and bulk tonnage copper-gold porphyry targets.

The companies have entered into a strategic exploration alliance agreement, under which they will work together to identify and acquire exploration concessions in Nicaragua, with a focus on copper-gold porphyry, skarn and epithermal precious metal systems.   

Rio Tinto will have a five-year option to acquire a 55% interest in the Borosi project by incurring $10 million in qualifying expenditures, of which $3 million is committed to be incurred within two years of obtaining the necessary permits and approvals.

If Rio exercises the first option and earns a 55% interest in the project, it has the right to earn an additional 10% interest by incurring a further $15 million over a three-year period. Thereafter, the company would have the right to earn an additional 10% interest, for an aggregate interest of 75%, by incurring another $20 million over a subsequent three-year period.

Calibre has been designated as the initial operator of the field work being completed under the earn-in agreement and will receive a fee equal to 10% of expenditures.

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