Photo by: Bloombeg
PERTH (miningweekly.com) – Australian gold miner Newcrest Mining has signed a farm-in agreement with junior Oro Verde over the Topacio gold project, in Nicaragua.
Newcrest reported on Monday that it would sole fund an initial $500 000 in direct expenditure within the first 12 months of the farm-in period to test the potential for large-scale, mineralised epithermal gold system.
Once the minimum commitment has been satisfied, Newcrest could either withdraw from the project or sole-fund an additional $2.2-million on project expenditure by August 2017.
Once the second expenditure was met, Newcrest could elect to continue with the farm-in by funding the $1.5-million option exercise payment to the vendor of the Topacio project.
Following expenditure of $4.4-million, Newcrest would have funded Oro Verde’s acquisition of the Topacio project, and would have earned a 51% interest in the project. Upon earning this interest, Newcrest would have the option to increase its shareholding by another 24% by spending an additional $3.5-million, including tenement holding costs, over the next three years.
This would bring Newcrest’s expenditure on the Topacio to $7.9-million, with the miner holding a 75% interest in the project.
“The introduction of Newcrest, one of the world’s largest gold producers, into the Topacio gold project is an important step towards realising the company’s objective of a multi-million ounce gold discovery,” said Oro Verde MD Trevor Woolfe.
“This agreement with Newcrest is a further validation of our 2014 strategy and the potential of the Topacio project.”
The Topacio project has a historical inferred resource of 2.7-million tonnes, grading 3.9 g/t gold for 340 345 oz of gold.
Work programmes have now been agreed for the minimum commitment phase, with planning now well under way, Oro Verde said. While initial preparation would start immediately, work activities were expected to accelerate at the start of 2016.