One of the world's largest mining conglomerates is set to expand its stake in Saskatchewan.
On Monday, Rio Tinto Exploration Canada said it has an agreement with ALX Resources Corp. for the latter's nickel project, about 20 kilometres northwest of Stony Rapids.
In the deal, Rio Tinto may acquire up to an 80 per cent stake in the project. It can do that by spending $12 million in exploration costs over six years and by making cash payments to ALX totalling $125,000. ALX Resources currently owns the whole project, while Rio Tinto will act as an operator.
Rio Tinto's decision was an endorsement of the project's potential, ALX Resources CEO Warren Stanyer said.
"(It's) taking a gamble on nickel in Saskatchewan," Stanyer said. "... These people are mine finders. They really don't like to dabble too much."
However, he added, years of sustained development activity may be necessary before the investment translates into more local employment.
Stony Rapids Mayor Mervin MacDonald declined to comment on the project or potential employment opportunities.
This is Rio Tinto's third ongoing project in Saskatchewan. In 2019, The mining giant seettled on an option agreement with Forum Energy Metals Corp. worth up to $30 million over seven years in exchange for an 80 per cent stake in the project.
Rio Tinto is in a legal dispute with Star Diamond Corp over their shared project in the Fort a la Corner Forest, about 175 kilometres north of Saskatoon. That revolves around a 2017 agreement under which Rio Tinto could spend $75 million in phases to acquire a 60 per cent stake.
The ongoing projects nonetheless signal confidence in the province's mining industry, Stanyer said, on top of the recent addition of the nickel project.
"(The projects are) an endorsement for the province," he said.
