That was an awesome explanation. VALE is paying money right now to get the ball rolling. It won't take three years of exploring to determine if they want to exercise their 80% or not. That is only the amount of time that is wanted by VALE to properly explore the property.
VALE has agreed to pay a nominal fee of $20k to own the OPTION to JV with us on S&N Lucky and they'll pay a further $75,000 to keep the option for up to three years. This is just for the sake of ensuring both sides are showing commitment to the proect, yet have a way out of things do not work out.
VALE will explore the claims during this option period, and if they like what they see they will be required to pay for a full a detailed exploration costing them a minimum commitment of $750,000, which will earn them an 80% interest in S&N Lucky and has I believe been designed to be wholly sufficient to get both properties smapled, drilled and a report filed to NI 43-101 standards, thus proving our reserves.
At any stage within the 3 years VALE can exercise their option to JV with us. If they do decide to JV with us then further costs will be met on an 80:20 pro rata basis I think, though I'm not certain about "with each party contributing... as per their interest".
That is how I read this PR.
What I also believe is that the exploration will start right away (if it hasn't already) and we will hopefully see some drilling this summer and our 43-101 plus VALE exercising their option by the end of the summer.
I also believe that 20% could be HUGE for KAT Exploration. It may not sound much, but if VALE are meeting all the costs and bringing all their infrastructure and expertise to bear, KATX will be making millions from this. And I do mean millions!
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