Raiden Resources Limited
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Why Did Raiden Resources Enter Into a MOU with First Quantum Minerals Australia Ltd (FQMA)?
Raiden Resources Limited (ASX: RDN) ("Raiden" or "the Company") has made a significant announcement, signaling a strategic move in its pursuit of value creation for its project portfolio. The company has entered into a Memorandum of Understanding (MOU) with First Quantum Minerals Australia Ltd ("FQMA") regarding the Mt Sholl Ni-Cu-PGE (Nickel-Copper-Platinum Group Elements) project. This strategic partnership brings forth a range of opportunities, including substantial funding for exploration and development.
Key Highlights of the MOU
Strategic Partnership: Raiden Resources has partnered with First Quantum Minerals Australia Ltd to advance the Mt Sholl Ni-Cu-PGE project, marking a crucial development for both companies.
Project Funding: Under the terms of the MOU, FQMA commits to solely funding the project up to the Decision to Mine (DTM) stage. During this phase, Raiden will retain a 30% free-carried interest, ensuring its participation in the project's future success.
Additional Rights: Raiden retains rights over gold and Lithium-Caesium-Tantalum (LCT) exploration within the project area, with an ongoing LCT exploration program.
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Acquisition of Project Interest: This strategic partnership follows Raiden's proposed acquisition of the remaining 20% project interest in the LCT and Ni-Cu-PGE mineral rights at Mt Sholl.
Transaction Terms
The transaction between Raiden Resources and FQMA comes with a structured set of terms:
Due Diligence Period: FQMA will have a 12-month due diligence period, during which they will pay Raiden $250,000 in cash and commit to spending a minimum of $1. 5 million, including ground-based electromagnetic and induced polarization surveys, along with a minimum drilling program of not less than 3,000 meters.
Earning Equity: Following the due diligence phase, FQMA will have the exclusive option to fund all exploration activities and studies up to the Decision to Mine (DTM) stage to earn a 70% project-level position. Raiden's 30% interest will be free carried during this phase.
Exploration Funding: FQMA is required to sole fund a minimum of $25 million over eight years on exploration activities and associated studies to earn a 70% equity stake. Raiden will receive $10 million in staged cash payments throughout this eight-year exploration cycle.
Development Stage: Upon reaching the Decision to Mine (DTM) stage, Raiden will have several options. They can co-fund their 30% portion of development costs, dilute to a 20% project-level decision in exchange for FQMA funding Raiden's development costs, sell their interest at fair market value, or dilute to a 1% Net Smelter Royalty (NSR).
Management's Perspective
Mr. Dusko Ljubojevic, Managing Director of Raiden Resources, provided insight into the significance of this transaction, stating, "This transaction is in line with our stated objective of generating maximum value for shareholders from our entire portfolio of projects, while management's key focus remains the realization of value from the LCT projects in the Pilbara. "
He went on to emphasize the potential of the Mt Sholl project, highlighting it as the largest open-pit Nickel-Copper-Platinum Group Elements sulphide resource in the district. The project's resource and exploration target are based on extensive drilling and technical studies over several decades. Importantly, these studies have indicated the potential for further mineralization, with all deposits remaining open along strike and to depth.
The MOU between Raiden Resources and First Quantum Minerals Australia Ltd marks a significant milestone in the development of the Mt Sholl Ni-Cu-PGE project. This strategic partnership brings the promise of substantial funding and technical expertise, potentially unlocking a district-scale opportunity for development. As exploration and development activities progress, stakeholders will be closely monitoring the project's evolution, recognizing its potential to shape the future of the Ni-Cu-PGE mining sector in the region.
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