Mining Weekly reported that following a strategic review, RMG Ltd. (ASX:RMG) has decided to withdraw from an option agreement regarding the Queensland-based Kamarga zinc project. The agreement was with Teck Resources Ltd. (TSX:TCK.B,NYSE:TCK).
RMG’s plan now is to focus on its operations in Chile.
As quoted in the market news:
In 2011, RMG subsidiary Sunlander Nominees entered into an agreement with Teck, gaining the exclusive right to acquire two exploration licences that made up the Kamarga project.
Under the terms of this agreement, Sunlander was to spend a minimum of A$0.61-million within the first two years of the agreement, and A$1.5-million within four years.
Sunlander was expected to drill two exploration targets nominated by Teck by September this year.
By completing the expenditure and drilling, Sunlander would gain full ownership of the two permits.
Furthermore, until the subsidiary had spent a total of A$10-million on exploration, Teck would have the right to earn back a 51% interest in the permits through sole-funding exploration expenditure to the sum of twice Sunlander’s expenditure, with a second earn-back option seeing the Canadian firm regaining an 80% interest by spending a further A$15-million.