PERTH (miningweekly.com) – Gold miner Newcrest Mining has signed a farm-in agreement with ASX-listed junior Prodigy Gold over its Euro project, in the Northern Territory.
Under the terms of the agreement, Newcrest could earn an initial 51% interest in the project by spending A$6-million on exploration over a period of four years.
The gold miner could withdraw at any stage following a minimum A$2-million spend, with Prodigy remaining manager of the project until the minimum commitment.
Newcrest could increase its stake in the project to 75% by spending an additional A$6-million on exploration within three years from electing to start the Stage 2 earn-in.
Following Newcrest’s earn-in, Prodigy could elect to co-fund future exploration and development work at the Euro project, or dilute its interest and convert it into a 1.5% net smelter profit, if the interest falls below 10%.
“The completion of the farm-in agreement marks a major milestone in advancing the Euro project and progressing the area towards the next major gold discovery,” said Prodigy MD Matt Briggs.
Exploration under the earn-in is expected to start in the third quarter of this year.
The Euro project covers some 3 478 km2 of exploration licence in the Northern Territory. Previous exploration work has primarily been soil sampling and patchy reconnaissance drilling, with 10 of the 17 tenements in the project having no drilling in the last 20 years.