Xstrata has agreed to bring forward the date by which it must exercise an option to acquire a 62.5% interest in Tampakan to September 2006.

In essence this means Indophil will spend around $27 million on a pre-feasibility – before Xstrata enters the fray – compared to the total of $70 million it’s estimated it will cost to complete all the feasibility work required to reach a development decision by the end of 2007.

Under the previous arrangement, which was originally agreed to between Indophil and MIM, Xstrata had until late 2007 to exercise its option, meaning Indophil faced onerous funding requirements.

MiningNews.net understands Indophil representatives visited Xstrata headquarters in Zug, Switzerland late last month seeking a change in the joint venture.

Should Xstrata exercise its option after Indophil has spent $27 million on the planned pre-feasibility, the major will pay the junior around $52 million, with around $32 million of that equating to direct reimbursement of Xstrata’s share of project costs to that point.

Indophil now intends to raise around $35 million in new capital at 44c per share, with ABN Amro Morgan, Tolhurst Noall jointly managing the capital raising.

AuSelect, which holds 3.2% of Indophil and is an offshoot of major Indophil shareholder Lion Selection Group (28.8%), will also provide “significant support” to the raising.

Using a 0.5% cut-off, Tampakan contains 700 million tonnes grading 0.8% copper and 0.3 grams per tonne gold for 6 million tonnes of contained copper and 7 million ounces of gold.

A conceptual open pit development and processing operation could cost around $700 million and deliver 140,000t per annum of copper and 150,000ozpa of gold for 24 years. Block caving the deposit is also being considered, as are larger development options.

Shares in Indophil were off 1.5c to 49.5c in midday trade.