Newcrest has qualified for a 40 per cent interest in the Havieron gold-copper project in the Paterson region of Western Australia.
The farm-in agreement between Newcrest and Greatland Gold in March last year has given Newcrest the opportunity to earn up to 70 per cent joint venture interest in Havieron.
This was achieved by spending $US65 million ($106 million) and completing several exploration and development milestones over a six-year period.
Newcrest may acquire an additional 5 per cent interest at the end of the farm-in period at fair market value.
During the farm-in period, Newcrest will have a first right of refusal over the remainder of Greatland’s Paterson project, including Black Hills, Paterson Range East and remaining areas of Havieron licence.
Newcrest commenced drilling at the Havieron Project during the June 2019 quarter and has increased drilling activity to eight operational drill rigs.
The company has now reached its stage-2 milestone in the agreement and will be proceeding to stage-3.
Stages 1 and 2 of the project required Newcrest to incur expenditure of up to $US20 million ($32.6 million) in the first 12 months of commencing exploration.
Newcrest managing director and chief executive officer, Sandeep Biswas said the milestone was achieved through significant investments by Newcrest.
“Today’s announcement highlights the significant investment we are making into this project,” he said.
“The results to date have been very positive and I believe that Havieron provides a great opportunity to improve the economics and extend the operating life of Telfer.”
Drilling activities at Havieron have so far demonstrated the continuity of high-grade mineralisation which extends over 450 metres, to vertical depths of 600 metres and remains open at depth to the northwest.
Newcrest is planning to expand drilling to a further 20,000 metres in hope to deliver a maiden resource estimate in the second half of calendar year 2020.
The company is considering an exploration decline by the end of calendar year 2020 or early 2021 to start commercial production within two to three years from the commencement of the decline.