Newcrest's Telfer plant will be used for processing ore from the Havieron project.
Shares in London-listed Greatland Gold jumped 35% on Tuesday morning, after the company announced that it had signed a farm-in agreement with gold major Newcrest to develop the Havieron gold/copper project in the Paterson region of Western Australia.
Newcrest has the right to acquire up to a 70% interest in 12 blocks that cover the Havieron target by spending $65-million and completing a series of exploration milestones in a four-stage farm-in over six years.
After meeting the milestones in the four-stage farm-in, Newcrest has the option to increase its interest to 75%.
Ore from Havieron would be processed at Newcrest’s Telfer gold mine, which was about 45 km west of the project, Greatland explained.
“Greatland will receive tremendous benefit from Newcrest's experience as a developer and producer at Telfer and Newcrest's broader understanding of the geology of the Paterson region. We believe that this deal represents a win-win for both parties due to the potential for significantly reduced capital costs and increased efficiency resulting from ore being toll processed at Newcrest's nearby Telfer mine. Moreover, Newcrest's expertise should help fast-track Havieron through to a completed feasibility study and, subject to positive outcomes, into production and positive cash flow,” said Greatland CEO Gervaise Heddle.
Newcrest would also have a right of first refusal over the remainder of Greatland’s Paterson project.
Greatland, which is listed in London, traded 35% higher at 2.54p a share shortly after the market opened. By 11:30, the stock fetched 2.18p a share.