Under the terms of the MOU, Vale can earn a 100% interest in the projects by spending $2 million on exploration over two years
Timok hosts the recently discovered Cukaru-Peki deposit and several producing mines: the Bor copper porphyry underground mine and the Majdanpek and Veliki Krivelj copper-gold porphyry open-pit mines. These properties, together known as the Bor mine complex, are currently controlled by China’s Zijin Mining Group.
Under the terms of the MOU, Vale can earn a 100% interest in the projects by spending $2 million on exploration over two years. Should Vale extend the option period for an additional year, it will pay $1 million during such extension year.
Mundoro will be the operator of the projects and receive an annual fee of $200,000 during the option period.
Upon exercise of the option, Mundoro will retain a 2% NSR royalty on the projects, of which Vale will have an option to purchase up to 1% of the NSR royalty with payments tied to the gold price at that time. At the current gold price, the value of the 1% NSR is estimated at $9.2 million.
Following exercise of the option, Vale must also make milestone payments to Mundoro totaling $9 million upon completion of four major milestones, beginning with a resource estimate filing and ending with the attainment of a development permit.
In November 2019, Mundoro granted Vale an earn-in option on four exploration licenses within the Timok Magmatic Complex. Under that deal, Vale can acquire a 75% interest in the projects for total exploration expenditures of $45 million.
