Amarc Resources (AHR.V) has entered into an earn-in agreement with Freeport McMoRan (FCX) to jointly explore the JOY copper project owned by Amarc. Freeport will be able to earn a 70% interest in the 482 square kilometer JOY project over a 10 year period while an initial C$35M in exploration expenditures is required to be spent within 5 years to obtain an initial 60% stake in the project. Freeport appears to be ready to hit the ground running as the company confirmed it’s budgeting a C$4M exploration program in the first year of the earn-in period.
To add an additional 10% interest in the project, Freeport will have to spend C$75M within an additional five years. The C$110M earn in price tag sounds hefty but Freeport could drop the option any day if the exploration program doesn’t yield the desired results.
Disclosure: The author has no position in Amarc Resources. Please read our disclaimer.