Uranium Resources Plc said on Thursday a unit of Rio Tinto Plc would have the right to explore for coal at Uranium Resources' licence areas in southern Tanzania under an option agreement.
Shares of Uranium Resources rose as much as 58.5 percent in morning trade and were up 0.62 pence at 2 pence at 0925 GMT, while Rio Tinto shares were up 5 percent at 1,592 pence on the London Stock Exchange.
According to the deal, Rio Tinto Mining and Exploration Ltd would have the right to exclusively farm in to 2,938 square kilometres of Uranium Resources' exploration licenses.
The farm-in would permit Rio Tinto Mining to earn a 51 percent stake by sole funding $7.0 million in exploration costs within four years of signing the deal.
Rio will also have a right to earn 29 percent more by completing a pre-feasibility study, the company said.
As per the agreement, Rio may withdraw at any time within the 12-month period after spending $200,000. If it withdraws prior to buying the additional 29 percent interest, it must sell its 51 percent interest.
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