Megado Minerals (ASX:MEG) signed an exploration agreement with Pure Exploration (USA), a subsidiary of Iluka Resources (ASX:ILU), for the North Fork project in Idaho, according to a Thursday filing with the Australian bourse.

Under the first tranche of the transaction, Iluka Resources agreed to pay AU$500,000 and reimburse the company up to AU$110,000 for claim maintenance fees for a two-year right to explore the property, the filing said.

In the second tranche, Iluka Resources may purchase 100% of the project during the two-year period for AU$1 million, according to the filing. In the third tranche, Iluka must pay the company AU$2 million within 30 days of achieving $10 million in revenue, with the option to convert this into a 2% gross revenue royalty.

Megado Minerals shares rose past 13% in morning trade Thursday, while Iluka Resources shares fell 4%.

Price (AUD): $0.02, Change: $+0.002, Percent Change: +13.33%