RNU’s main focus is on its Siviour Battery Anode Materials Project and Carnding Gold Project, both located in South Australia.
The Marree Project is largely copper focused, although samples from the area have shown the presence of gold and other rare earths.
At the time of writing, the RNU share price is up 10% to trade at 1.1 cents per share.
Renascor Resources picks RIO’s brains
With a positive outlook on the price of copper, why would RNU want to offload its copper project?
In this case: Knowledge.
According to the announcement released today, RNU and RIO have entered into a binding agreement regarding EL 5586 (see below figure) at the Marree Project.
Source: Renascor Resources
As part of the agreement, RIO may earn up to 80% interest through payments of $200,000 to RNU and sole funding exploration expenditure of $3 million.
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RNU said it will retain sole ownership of the surrounding tenements.
The rationale behind today’s farm-in agreement is that it offers RNU the opportunity to benefit from RIO’s exploration expertise and resources.
And for a junior explorer, that could be of serious benefit.
It will also allow RNU to focus on its core projects with near-term potential, which RNU hopes will generate significant value uplift.
RNU managing director David Christensen commented:
‘We are delighted that Rio Tinto Exploration has agreed to commit its considerable resources and expertise toward exploring EL 5586 and that Renascor shareholders will have an opportunity to benefit from the discovery potential of this highly prospective, but underexplored exploration prospect.’
How much is knowledge worth?
The quick answer: More than what the minerals in the ground at Marree are worth.
So why sell for a sum that RIO would consider chump change?
RNU is already flush with cash, with approximately $5.2 million cash on hand as of 30 September 2020.
Essentially, what RNU is achieving is progressing the Marree Project without spending a cent, and getting a lesson from one of the world’s most successful miners.
Hopefully, RNU can then channel what it learns from RIO into successful exploration at the surrounding tenements.
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