Newcrest Mining has signed a farm-in agreement with Prodigy Gold over the Euro gold project in the Tanami region of the Northern Territory.
Australia’s largest gold miner will fund up to $12 million over seven years in return for up to a 75 per cent interest in the Prodigy project.
It is the latest in a series of exploration agreements Newcrest has made over the past year. In May, Newcrest entered into a near-identical, $12-million, seven-year, 75 per cent agreement with ABM Resources — also in Tanami, NT.
The miner also agreed to five joint ventures with Encounter Resources on the Western Australian side of the Tanami.
There are two earn-in stages under the terms of Newcrest’s agreement with Prodigy. In the first stage, Newcrest can earn up to 51 per cent of the Euro project if it spends $6 million in exploration funding over four years, with an option to withdraw after a $2 million minimum commitment.
In stage two, Newcrest may increase its stake to 75 per cent if it agrees to spend a further $6 million on exploration within three years. If Newcrest acquires 51 per cent of the Euro project and ceases sole funding (or alternatively increases to a 75 per cent interest in the project), a JV between the companies will be created.
The project area covers nearly 3500km2 of exploration licences in the Northern Territory’s gold-rich Tanami region and contains structures parallel to the Trans-Tanami Trend, which incorporates Newmont’s own Callie gold mine.
Matt Briggs, Prodigy Gold managing director, said that the farm-in agreement represented a major milestone for the Euro project.
“Newcrest and Prodigy are combining technical skills and intend to commence exploration during [the third quarter of] 2018,” he said.