EDC and Hot Rock form JVs on 2 Peruvian projects
Hot Rock Limited and EDC are commencing exploration at the Quellaapacheta and Chocopata JV projects in Peru.
In a release last week, Australian developer Hot Rock Limited announced that Energy Development Corp. (EDC) “is currently incorporating the Peruvian Quellaapacheta and Chocopata joint venture companies as required in accordance with the agreements signed in May. EDC has notified HRL that it intends to commence detailed field work programs in August including geological, geochemical and geophysical magno-telluric (MT) surveys at Quellaapacheta followed by Chocopata.
HRL will receive from EDC an initial payment of US$0.8 million ($0.4m for each of the Peru projects) after the exploration tenements are transferred into the newly incorporated JV companies. If EDC withdraw from a project within 6 months of the tenement being transferred into the JV company, the $0.4m is refundable. A further payment of US$1.2 million (US$0.6 million for each project) will be paid if EDC continues with the Peruvian projects past an initial 15 month period.
EDC is sole funding up to US$12 million at each project for surface exploration and deep exploration drilling activities before the EDC (70%) and HRL (30%) pro-rata joint venture contribution commences for any future resource development phase.
Hot Rock Executive Chairman, Dr Mark Elliott stated: “We are pleased to be commencing exploration on our two joint venture Peruvian projects with the initial objectives of defining drill targets at both projects and commencing exploration drilling in 2013”.
In order to progress the Peruvian Joint Ventures HRL has decided not to pursue any potential legal action against EDC for their withdrawal from the Longavi project in Chile. The project will now revert to being 100% owned by HRL and the company will investigate alternatives for its development.
Source: Company release (pdf)