Arequipa signs up Asarco

Junior explorer Arequipa Resources (VSE) has formed a joint venture with a major mining company.

That company, Asarco (NYSE), can earn up to a 60% interest in nine newly formed Peruvian companies, each of which holds a separate property. The properties comprise more than 30,000 hectares in the Southern Peru Copper Belt, which hosts four of the world’s largest copper deposits. An initial 40% can be earned by paying US$1.6 million cash and spending US$10 million on each project over a 4-year period. Asarco can boost its interest to 51% by delivering a bankable feasibility study by the end of the fifth year. Upon completion of the study, the major will have the one-time right to buy a further 9% interest for US$5 million.

The agreement with Asarco marks the consummation of Arequipa’s stated objective of forming joint ventures with major mining companies on all of its copper prospects. Earlier this year, Arequipa signed a joint-venture agreement on five of its other copper prospects with Phelps Dodge (NYSE). Arequipa plans to concentrate its efforts on gold properties, principally the Paron, also in Peru, where a second phase of drilling is to begin shortly.