PERTH (miningweekly.com) – Gold junior Silver Lake Resources has entered into a conditional farm-in and joint venture (JV) agreement over its Great Southern project, in Western Australia.

Under the terms of the agreement, ACH Minerals could earn a 51% interest in the JV by spending a minimum A$3-million on exploration over the next three years.

Once a majority interest has been earned, the company could elect to increase its interest in the JV by spending a further A$3-million over another three-year period.

As part of the agreement, Silver Lake has granted ACH an option to acquire the Great Southern project for a cash consideration of A$5-million, in excess of any expenditure incurred to that point.

Silver Lake MD Luke Tonkin said on Thursday that the agreement was a step forward for Silver Lake, and was consistent with the company’s commitment to realise value for its non-core assets.

“Following the recent rationalization of our tenure in the Murchison, this JV in the Great Southern further reduces our financial and technical commitments outside of our core Mount Monger operations and installed infrastructure footprint.”

Silver Lake in November entered into two separate transactions to extract value from its noncore tenements in the Murchison region of Western Australia, signing a conditional sales and purchase agreement with fellow-listed Metals X over the Comet asset, and entering into a farm-in and JV agreement with ASX-listed Musgrave Minerals over the Cue project.

The agreement with ACH was subject to a number of conditions, including Foreign Investment Review Board approval, third party approvals, Ministerial consent and ACH satisfying Silver Lake that it had cash reserves of at least A$2-million.

“We continue to focus on maximizing the returns from our highly prospective and under explored Mount Monger operation and tenement holdings. The next stage of Silver Lake’s evolution is well under way with the start of mining at Lucky Bay and Santa openpits, and a focused A$15.5-million exploration programme in 2016 targeting the discovery of high margin Daisy Milano repeat systems,” Tonkin said.