Evrim Resources (EVM.V) has announced it signed an exploration agreement with Arcelor Mittal (NYSE:MT) which is one of the world’s largest steel producers. As per the terms of the agreement, both companies will start exploring for iron ore deposits in Mexico whereby Arcelor Mittal funds 100% of the exploration costs. Arcelor will gain a 100% interest in all discovered projects, subject to a royalty (on all produced commodities) payable to Evrim.
As of at the end of September 2013, Evrim had a working capital position of approximately C$4M, so we don’t expect the company to tap the equity markets anytime soon. The exploration agreement with Arcelor Mittal is an excellent way to add more assets without spending a single dollar on the ground.
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Disclosure: The author holds no position in Evrim Resources. Please see our disclaimer for current positions.
