Platinum miner Lonmin has announced that it has agreed to enter a new joint venture with Canadian outfit Inco in a bid to develop deposits in Ontario.

The two firms will collaborate on a project in the Sudbury Basin, targeting platinum group metals in what they hope will become a major new resource.

The joint venture is split down the middle, and will focus on six properties Inco holds in the region.

Under the terms of the agreement, Inco will contribute the rights and use of certain key aspects of its infrastructure, with Lonmin bringing its technical expertise in the pgm sector.

Lonmin's chief executive Brad Mills said he was excited by the potential of the new venture.

"We believe the Sudbury Basin has significant unexploited potential for this type of pgm deposit.

"The venture with Inco provides the opportunity to leverage our technical skills, extend our pgm growth profile, achieve a degree of geographical diversification and complement our existing joint venture with Wallbridge Mining in Sudbury."

The joint venture will pay Inco a three per cent net smelter royalty on all product sourced from its deposits.