Red Metal (ASX:RDM) said it executed term sheets with Chalice Mining (ASX:CHN) on the Callabonna magnetic and gravity targets along the northern margin of the Curnamona Province in South Australia, according to a Wednesday Australian bourse filing.

The companies agreed on terms for separate joint ventures over two of Red Metal's Callabonna exploration licenses, with large hematite-style or magnetite-style copper and gold breccia deposits as the exploration priority, per the filing.

For the first license, Chalice can earn between 65% and 73% of Red Metal's interest under its existing heads of agreement (HOA) with Variscan Mines (ASX:VAR) by spending AU$6 million over four years, including a minimum of two basement drill tests within the first 12 months, the filing added.

Red Metal will have the right to contribute between 19% and 35%, depending on Variscan Mines' election under the existing HOA, with Variscan's rights remaining unchanged by the new agreement, the filing said.

For the second license, Chalice can earn 65% by spending AU$6 million over four years, including a minimum of one basement drill test within the first 12 months, with Red Metal retaining the right to contribute at 35% after Chalice has earned in, the filing added.

Preparations for drilling in the 2026 field season will soon be underway, it added.

Red Metal's shares rose almost 4% in recent Wednesday trade, while Chalice Mining were up nearly 1%.