JOHANNESBURG (miningweekly.com) - Midtier gold development and exploration company Gold Road Resources has signed a sale agreement to acquire joint venture (JV) partner Sumitomo Metal Mining Oceania's 50% interest in the South Yamarna project for A$7-million in cash and certain rights of first refusal and first negotiation.

The acquisition will consolidate Gold Road's ownership of the majority of the Yamarna belt, which currently hosts 6.8-million ounces of gold in resource.

In addition to Gold Road becoming owner of 100% of the South Yamarna project (about 2 467 km²), Gold Road also owns 100% of the North Yamarna project (about 2 455 km²) and 50% of the Gruyere JV with South Africa's Gold Fields (144 km²).

Gold Road MD and CEO Ian Murray said on Monday that the company established the South Yamarna JV with Sumitomo in 2013, at a time when Gold Road and most other junior explorers were experiencing severe funding constraints.

Since then, the company has discovered the 6.2-million-ounce Gruyere gold deposit, which will be producing gold and significant cash flows from 2019, with the company's economic circumstance having improved through the JV concluded in 2016 with Gold Fields.

Murray further stated that the partnership with Sumitomo had been an integral part in unlocking the potential of the South Yamarna project.

The acquisition of Sumitomo's 50% interest in South Yamarna gives Gold Road greater control of the Yamarna belt, where the company will be increasing exploration activities upon completion of the summer targeting and ranking process.

Completion of the agreement is scheduled to occur on or before June 30 this year, with Gold Road being responsible for all costs and expenses for the South Yamarna project and to solely determine all exploration programmes from January 2018.

In addition, Gold Road intends to undertake targeted framework drilling on several smaller deposits that did not meet the size criteria set by the South Yamarna JV.

As part of the Regional Co-operation Arrangement with Gold Field's subsidiary, Gold Road has the right to toll treat ore on commercial terms at the Gruyere project's processing plant. This right will extend to 100% of Gold Road's interest in the South Yamarna project tenements and potentially enable smaller size deposits to be economic.

Positive results from these programmes could see rapid progress to infill and extensional programmes targeting new gold resources in this exciting project area, Murray commented.