The Palito mine in Brazil
Brazil-focused gold miner Serabi Gold has formed a strategic exploration alliance with diversified major Vale, through its subsidiary Salobo Metais, focusing on copper discoveries within the exploration tenements around the Palito and Sao Chico mines.
The company owns 61 000 ha of tenements in the Palito Complex tenement area, where the Matilda discovery was made last year.
“Making the discovery of the Matilda porphyry prospect in 2022 was a major milestone for Serabi. However, bringing in a partner with the expertise and resources of Vale, will enable us to properly evaluate Matilda and the other significant targets within our tenement area, and move them forward more quickly. The exploration alliance is focused on large scale copper projects and allows Serabi to maintain its attention on its gold exploration targets,” said CEO Michael Hodgson.
In the first phase of the alliance, Vale will sole fund up to $5-million in exploration and in the second phase, the major may elect to continue exploration or to sole fund one or more selected copper projects to prefeasibility study stage.
Vale will then have an option to acquire a 75% stake of a legal entity that will hold the copper project for $5-million. Vale will continue to sole fund the joint venture (JV) by capital contributions to completion of a definitive feasibility study (DFS), while Serabi retains a 25% interest.
Vale will also have an option to acquire an additional 15% interest in the JV company, or a further payment of $5-million or 1.5% of the net present value (NPV) of the project, taking their interest to 90%. Serabi then has a put option to sell their remaining 10% interest in the JV for a further $10-million and a 1.5% net smelter royalty.
The JV company may acquire additional copper projects from Serabi, in which case Serabi will be entitled to additional payments of the higher of $5-million or 1.5% of the NPV of the project for each, when a DFS has been completed.