PERTH (miningweekly.com) – Gold miner Newcrest Mining has inked a joint venture (JV) agreement with Greatland Gold over its Havieron project, in Western Australia, some 45 km east from the existing Telfer operation.

Newcrest has met its Stage 3 expenditure requirement at the Havieron project, having spent $45-million on exploration, and is now entitled to earn an additional 20% interest in the JV, taking its overall share to 60%.

The JV agreement facilitates the expansion of exploration and early work activities, including the construction of a boxcut and decline.

The original farm-in agreement over the Havieron project started in May last year, under which Newcrest could earn up to a 70% interest in the project by spending $65-million and completing a prefeasibility study (PFS) over a six-year period, and an additional 5% interest at the end of the farm-in period at fair market value.

The company’s ability to earn this 70% interest remains unchanged with the inking of the JV agreement.

Prior to the completion of a PFS, Greatland Gold would fund its 30% share of early works and growth drilling activities, and after completion of the study, the JV partner will fund its proportional share of all JV expenditure towards the developer of a feasibility study.

In addition to the JV agreement, the two companies have also entered into a loan agreement, with Newcrest providing Greatland Gold with access to $50-million in loan facilities.

Interest on the loans will accrue at the London inter-bank offered rate, plus 8%.

The loan has been secured against Greatland Gold’s JV interest, and will be used to fund its share of early works and growth drilling activities, up to a completion of a PFS, and thereafter, JV expenditure requirements towards the completion of a feasibility study.

“We are excited to extend our relationship with Greatland Gold and expand our presence in the highly prospective Paterson Province. The Havieron JV and loan agreements support the continued progress at Havieron with the potential to deliver commercial production within two to three years from the commencement of the decline,” said Newcrest MD and CEO Sandeep Biswas.

Additionally, the two companies have also entered into a farm-in and JV agreement over Greatland Gold’s Black Hills and Paterson Range East exploration, through a new JV agreement called the Juri JV.

“The Juri JV complements our strong pipeline of exploration prospects and the associated tenements are favourably located in close proximity to our established Telfer operations,” said Biswas.

Under the terms of the this agreement, Newcrest has been granted an initial 25% interest and has the potential to earn a 75% interest through spending A$20-million over a two-stage earn in, spanning five years.