Shares in Tasman Resources soared after the junior mineral explorer signed a deal for Rio Tinto to take control of its Vulcan prospect in South Australia.
The prospect is near BHP Billiton’s huge Olympic Dam mine, which the federal government approved for expansion on Monday.
Tasman shares closed up 4.4 cents, or 72.13 per cent, at 10.5 cents after hitting an earlier high of 13 cents.
It was the second-highest gaining stock on the Australian bourse on Monday.
The Perth-based company said it had signed a conditional agreement with Rio Tinto, giving the mining giant the right to earn up to an 80 per cent interest in the Vulcan prospect, where Tasman first identified iron oxide, copper, gold and uranium in 2009.
Under the deal, Rio Tinto will spend as much as $75 million on exploration at Vulcan and also pay Tasman up to $17 million in cash.
Tasman said the conditions were expected to be satisfied over the next six to eight weeks.
Tasman executive chairman Greg Solomon said the company had received approaches from other parties about possible joint ventures or sale options over the project, but Rio Tinto fit the bill with its technological expertise and financial capability.
“Since first identifying the Vulcan prospect, we have maintained an unshakeable belief about the similarity of this prospect’s mineral styles relative to Olympic Dam and the potential for it to host a deposit of significant value,” Mr Solomon said in a statement.
