Fox Resources and Pilbara Minerals have taken the first steps towards a farm-in agreement and possible joint venture over 10 of Pilbara's 14 exploration tenements in the West Pilbara.
Under the terms of the memorandum of understanding, Fox will acquire an 80 per cent interest in the 10 tenements increasing it tenement holdings by 87 per cent from 1142sqkm to 2140sqkm.
Under the proposed farm-in agreement and joint venture, Fox Resources will acquire up to an 80 per cent interest in the tenements, in return for carrying out extensive exploration activity as project operator.
Fox will make an upfront cash payment of $150,000 to Pilbara Minerals to earn 40 per cent, with the remaining 40 per cent being earned over three years for yearly expenditure of $565,000 in each of the first two years and $839,000 in the third.
The tenements are prospective for base and precious metals.
Pilbara Minerals executive director Gavan Farley said the company had looked at a number of ways to progress its projects and it made sense to work with Fox because of the proximity of their other projects, their familiarity with the area and expertise.
The two companies are expected to finalise the binding farm-in and joint venture agreement by January 31.
At 7.50am, Fox shares last changed hands for 4.1 cents while Pilbara Minerals shares last traded for 2.9 cents.