PERTH (miningweekly.com) – Gold major Newcrest Mining has signed a farm-in agreement with fellow listed Laneway Resources that could see the gold miner earn an 80% interest in the Southern Coromandel gold project, in New Zealand.
Under the agreement, Newcrest would fund two stages of minimum work programmes, worth an undisclosed amount. Following the minimum works programme, Newcrest would have the right to earn an 80% interest in the project, and would be named on the project title.
Following the farm-in period, in which Laneway would act as manager of the project and would earn a management fee, the two companies would likely enter into a joint venture to jointly fund the future development of the project, in accordance with their equity position.
If Laneway elected not to fund its equity position, the junior’s interest would be diluted through a mutually agreed formula, and once diluted past 10%, the company could convert its shareholding to a 2% net smelter royalty.
Newcrest could elect to purchase this net smelter royalty at A$500 000 for every 1%.
The Southern Coromandel project is in the same district as the Waihi gold mine, which Newcrest has agreed to sell to OceanaGold for $101-million.