PERTH (miningweekly.com) – Gold miner Newcrest Mining and fellow-listed Encounter Resources have entered into five separate joint venture (JV) agreements in the Tanami and West Arunta regions of Western Australia, covering some 4 400 km².

The five JVs, which include Selby, Watts, Lewis, Phillipson and Aileron, will initially be on a 50:50 basis covering the total acreage.

Newcrest will make a A$100 000 payment to Encounter following the execution of the Phillipson JV, and a A$400 000 payment following the later of July 2018 or the grant of tenement E80/5045. A further payment of A$500 000 will be due if Newcrest elects to continue activity on the granted tenement beyond 12 months from the grant.

Encounter could maintain its 50% interest in any and all of the JVs by contributing to its share of exploration expenditure. Should Encounter elect not to contribute on a 50:50 basis, Newcrest could increase its interest to 80% in that relevant JV, by sole funding exploration activities and delivering a Joint Ore Reserves Committee-compliant inferred resource of greater than one-million ounces of gold or gold equivalent.

If Encounter takes the decision not to contribute to expenditure after previously contributing, and prior to a decision to mine, the company’s interest would dwindle to 10%.

If Encounter’s interest dilutes to below 10%, the interest will be transferred to Newcrest and Encounter will be entitled to a 2% net smelter return royalty.

Furthermore, Encounter could elect to sell its JV to a third party, subject to Newcrest having a pre-emptive right. Encounter will also retain a pre-emptive right in the event that Newcrest wished to sell its JV interest to a third party.

“The Tanami region of Western Australia ticks so many boxes. It is a true district scale opportunity where new datasets provided by the Geological Survey of Western Australia have significantly enhanced prospectivity,” said Encounter MD Will Robinson.

“Limited prior shallow drilling has outlined footprints of several potential major mineral systems. Aileron and Phillipson are genuine first mover opportunities in untested regions where new data is opening up mineral exploration. We are excited to be fast-tracking exploration via JVs with Newcrest.”