PERTH (miningweekly.com) – Junior Exterra Resources has signed a farm-in and joint venture (JV) agreement with Bar Twenty over that company's namesake gold project, in Western Australia.
The Bar Twenty project is some 20 km from Exterra’s Second Fortune gold mine, where the company is expected to produce 73 000 oz over an initial two-year mine life.
Exterra told shareholders on Tuesday that the Bar Twenty project would be developed and run in parallel with the Second Fortune mine development, and had the potential to generate a secondary source of ore to add to the planned production at Second Fortune.
Under the terms of the agreement, Exterra will have the right to explore and develop the Bar Twenty operation, and could earn a 75% interest in the project by producing 5 000 oz of gold from the operation.
On the start of the JV, Exterra and Bar Twenty will each contribute to all ongoing expenditure on a 75:25 pro rata basis. Bar Twenty will have the right to have its JV contributions carried by Exterra to a maximum of A$1-million which will be repaid from 50% of Bar Twenty’s entitlement to gold produced from the project, or to convert its JV interest into a 2.5% net smelter royalty.
Under the JV agreement, Exterra will also have the right of first refusal to enter into an agreement with Bar Twenty over an additional seven gold projects, consisting of eight prospecting licences and three exploration licences, all located within 25 km of the Second Fortune mine.