AusQuest (ASX:AQD) has derisked Australian exploration by extending its partnership with South32 (ASX:S32), according to a Monday Euroz Hartleys note.

South32 said on Monday that its subsidiary has extended its partnership with AQD for a further two-year period to Dec. 31, 2027, under which AQD targets new deposits and mineral provinces with ore potential to secure prospective exploration opportunities offered exclusively to S32.

With a proven nine-year collaboration and a pipeline of targets in Australia to test, AQD is "well-positioned" to deliver value through exploration success, the note added.

Euroz Hartleys noted that AQD receives a 15% admin fee on all project expenditure, and the agreement provides AQD with a low-risk, leveraged model to generate high-potential discoveries while retaining upside exposure through equity and royalty provisions.

Euroz Hartleys maintained its speculative buy rating on AQD and raised its price target to AU$0.11 from AU$0.095.

AQD shares fell 1% in recent Tuesday trade, while S32 shares shed about 2%.