Evolution Mining has formed a joint venture with Musgrave Minerals over the Lake Austin portion of the Cue gold-copper project in Western Australia.
The $18 million agreement is being used to accelerate exploration at Cue, which lies in the Murchison region of the state.
Musgrave is set to retain its interest in areas hosting known gold resources, including Break of Day and Lena and the mainland area.
Evolution vice president discovery and business development Glen Masterman said the company was excited to be partnering with Musgrave to accelerate exploration of the Cue project.
“Cue is a quality project which has the ability to generate new drill results that extend previously identified mineralised zones,” he said.
“This agreement is consistent with Evolution’s strategy of focusing on orogenic and epithermal deposit styles that can create value through future discovery.”
Musgrave managing director Rob Waugh said the company was pleased to partner with Evolution, which was considered to be one of the largest gold producers on the ASX and a highly-regarded explorer.
“The JV will fast track exploration and we look forward to leveraging Evolution’s extensive technical knowledge and financial resources with our in-house expertise to accelerate potential gold discoveries at Cue,” he said.
“This is a positive result for Musgrave and a strong endorsement of the company’s project and upside exploration potential.”
As part of the agreement, Evolution can earn 75 per cent in the JV area by sole funding $18 million over five years with a minimum expenditure of $4 million to be completed in the first two years.
If Evolution does not spend the entire $18 million within five years, Musgrave will retain 100 per cent ownership.
Evolution has agreed to subscribe to 18.6 million Musgrave shares at a price of 8.07 cents per share to raise $1.5 million.