PERTH (miningweekly.com) – Junior Aura Energy has inked a C$4.5-million funding term sheet to create a joint venture (JV) vehicle with TSX-listed Chilean Metals for its gold, base metals and battery metal tenements in Mauritania.

Chilean will pay the C$4.5-million in four scheduled payments before October 2021, along with one-million of its own shares to Aura, in exchange for a 50% interest in the JV, which will hold Aura’s gold and base metal licences in Mauritania.

Aura’s Tasiant South tenements cover some 435 km² on two lightly explored mineralised greenstone belts, which lie along strike from the 20-million-ounce Tasiast gold mine, where production is being increased to 530 000 oz/y of gold.

It was intended that the JV vehicle would be listed on the TSX-V exchange, with Aura to provide the management and technical team, and to hold three board seats, while Chilean would hold the remaining two board seats.

“Aura has maintained an exceptionally strong belief in these extremely under-explored greenstone belts given the high-quality preliminary gold and base metal exploration results achieved. This substantial funding package from a group of seasoned resource investors and developers will help reveal their true potential,” Aura executive chairperson Peter Reeve said on Tuesday.

“Aura is very pleased that Chilean Metals has recognised the attributes of this geological belt and welcomes Chilean to this project. Chilean’s understanding of what it takes to enable mineral discovery and their connection to important gold investment sources will be important ingredients in this transaction,” he added.

“The current global economic environment is driving the gold price and provides the perfect environment for a separate vehicle to hold these strongly undervalued assets.”

Aura and Chilean are now working on a definitive agreement, targeted for the end of August.