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The formalisation of the earn-in and JV means that Rio will make a cash payment of $500,000 to Strandline within 30 days, and sole-fund at least $2 million of exploration in the first 18 months.
Early work is underway ahead of a reconnaissance-level aircore drilling program at the priority target areas of Sudi, Kiswere, Madimba and Miteja next month.
Rio can earn 51% of the project within three years by sole-funding $5 million of exploration, though Strandline will remain the manager up until that point.
Aside from its own mineral sands operations in Africa, Rio is active in looking for new opportunities on the continent.
It is has a JV with AIM-listed Savannah Resources over the Mutamba project in Mozambique, where a scoping study this month returned capital costs of $152 million, plus $74 million contingency, for a 30-year operation based on a resource of 451 million tonnes at 6% heavy minerals from 2020.
Strandline managing director Luke Graham said the Rio JV allowed Strandline to direct its financial resources towards the development of the more advanced Fungoni heavy mineral sands project and the drilling of its Tanga project, both in Tanzania.
A definitive feasibility study and final investment decision for Fungoni is set to be completed in the September quarter.
Last month, Strandline upgraded the Fungoni resource by 38% to 21.7Mt at 2.82% total HM.
Strandline is well-funded, having completed a A$5.2 million placement to institutional investors last month.
Shares in Strandline jumped by 16.7% to 0.7c. Last month’s raising was carried out at 0.8c.
