PERTH (miningweekly.com) – Junior gold developer ABM Resources has taken the first step in divesting its regional exploration portfolio by signing an agreement with fellow-listed junior Clancy Exploration over its North Arunta regional projects, in the Northern Territory.

The North Arunta regional projects are between 200 km and 500 km from ABM’s flagship Old Pirate gold project, and cover 12 780 km². The area includes a number of gold and base metal prospects.

Clancy has now paid an option fee of A$250 000 for the exclusive option to complete a due diligence on the project area, with ABM entitled to perform a due diligence on Clancy.

If the due diligence proves positive, Clancy would issue ABM about 125-million fully paid shares, as well as 175-million unlisted options, as well as the company’s entire shareholding in ASX-listed Genesis Resources, which accounted for more than 8.1-million shares, or an agreed cash equivalent.

ABM would also have a right to an initial one nominee to the Clancy board.

Clancy would further pay a A$150 000 option fee and an acquisition fee of A$200 000 in cash.

“As ABM moves into becoming a development and mining company, we have been looking at a number of divestment and exploration strategies for our regional portfolio,” said MD Darren Holden.

“The North Arunta region is an area of great potential, but is a considerable distance from our main focus area. Along with staged development of Old Pirate, significant discoveries at Buccaneer and Hyperion, and numerous exciting regional targets, we are focused on consolidating our position and effort in the Tanami region.”

Holden noted that the agreement with Clancy provided ABM with cash and continued exposure to upside in the North Arunta region, while reducing its exploration requirements.

Clancy MD Gordon Barnes told shareholders that the acquisition would deliver an exciting portfolio of advanced prospects and greenfield exploration targets in a highly prospective region.

“ABM and previous explorers have defined extensive gold systems at the Barrow Creek and Reynolds Range projects with strike lengths in excess of 10 km.”

It was anticipated that the transaction would be completed ahead of the 2014 field season, allowing Clancy to start drilling in April next year.