Avanco Resources announced it has completed an investment agreement on a transaction that provides Avanco 100% of an extensive tenement package adjacent to the Rio Verde Project. The new tenement hosts an extremely prospective 14km long copper trend, a major motivator for Avanco’s significant increase and widening of the Rio Verde drill program. Additional rigs have been sourced and are mobilizing.

The investment secures an additional extensive land package that secures additional ground along strike from the Rio Verde Project. According to Avanco, the potential for a large discovery is underscored by Xstrata Copper (Xstrata) that has chosen to carry an option to back-in and form a joint-venture with Avanco.

The transaction recognizes the significant exploration potential associated with the area and is subject to an option agreement with Xstrata. Under Avanco’s agreement with Xstrata, in the event Avanco discovers a copper resource with potential to support the production of 80, 0004 tons per annum of copper metal for a life-of-mine greater than 8 years, Xstrata can exercise the right to back-in up to 70% (this excludes pre-existing Rio Verde and Serra Verde tenure).

On exercising the back-in, Xstrata and Avanco will form a joint venture company on a 70/30 equity basis respectively. As part of the back-in conditions, Xstrata will, reimburse the Company two times the value of exploration expenditures and offer a favorable financing facility to assist Avanco in funding its contribution to project development capital.

However, should the back-in not occur, Xstrata Copper will be entitled to a 0.5% NSR production royalty from Avanco. Confident of continuing exploration success, Avanco has secured additional drilling rigs and expects six rigs to be operational by end of May. With greater than $20m cash, Avanco is in a very strong financial position to aggressively explore and pursue new high profile copper acquisitions.

Avanco is a Brazilian focused exploration and development company. The company is developing the high grade Rio Verde Copper Project and exploring for nickel-platinum group metals in the world class Carajas Mineral Province in northern Brazil.

The Carajas region is by virtue of the known mines and recent discoveries, is regarded as one of the most prospective mineral provinces in the world for the discovery of copper-gold, iron and nickel-platinum resources. The Company has five Carajas exploration properties and is actively seeking to increase its presence in the region.