Snapshot: Enami’s and Rio Tinto’s Cerro Cumbre agreement

National mining company Enami and London-based Rio Tinto will jointly explore the Cerro Cumbre greenfield copper, gold and zinc prospect in Chile’s northern Antofagasta region.

Recently, both companies signed a proposal on a potential earn-in agreement that is planned to be ready by the end of March, Enami’s development and innovation manager, Andrés Rovira, told BNamericas.

Cerro Cumbre is 100km south of the city of Calama, 40km south of Antofagasta Minerals' Centinela copper mine, and 20km northwest of Codelco’s Gabriela Mistral division. 

Covered by 16 mining concessions, 840 permits already exist for the 5,100ha prospect.

Between 2000 and 2010, state copper company Codelco drilled around 2,300m in the area without finding mineralization that fit its business model. 

Looking for investment, in 2017 Enami presented the prospect at the Prospectors and Developers Association of Canada's (PDAC) annual convention in Toronto. 

“Last year, two mining companies showed interest on the property and one of them was Rio Tinto. After the potential earn-in agreement we could start the process for a joint venture,” Rovira said.

He declined to divulge investment details, but said the terms of the agreement provide for Rio Tinto financing the exploration program.

Enami’s business model is to seek partnerships with investors through non-disclosure agreements and exploration and development programs that could transform properties into mining projects, in exchange for an interest over the prospect. Enami contributes with mining concessions, information about the prospects and exploration permits.

In 2015, Enami signed two option contracts with Barrick Gold and Rio Tinto. Barrick’s agreement involved US$3.5mn in exploration expenditures over three years to buy 80% of the Tres Puntas prospect in Atacama region.

The first agreement with Rio Tinto involved US$6mn in exploration expenditures for an 80% interest in the Leoncito El Loa property on the border of Tarapacá an Antofagasta regions.  

Rio Tinto currently owns 30% of the world’s largest copper mine, Escondida, in northern Chile, which produces around 1.2Mt of copper a year. In 2019, the miner invested US$624mn in exploration in Australia and Canada. 

Enami is also looking to reach agreements with private companies over lithium projects. The state company is in talks with Vancouver-based Wealth Minerals to jointly explore, develop, produce and export lithium.