Newcrest Mining is assessing a major tenement position in the Tanami region of Western Australia acquired by project generation alliance partner Encounter Resources.
The two companies formed the alliance to identify new mining opportunities in WA during July this year. Newcrest agreed to provide Encounter up to $500,000 over the following 12 months to generate opportunities within an alliance area.
If the Tanami prospect is approved, Newcrest and Encounter will form a joint venture at the tenements to continue exploration under the terms of the alliance.
The tenements acquired by Encounter cover an area of more than 4200 square kilometres and 100km of strike along the structural corridor that extends through the Tanami region from the Northern Territory into WA.
Encounter managing director Will Robinson noted that the Tanami gold province already hosted Newmont Mining’s Callie gold mine.
“This is one of the world’s lowest cost gold mines where recent near mine exploration success has added new high-grade gold resources of significant scale,” Robinson said.
“This district scale opportunity, with limited prior and modern exploration, covers the prospective Tanami structural corridor as it extends into Western Australia.
“The limited exploration to date has returned high-grade gold intersections and numerous gold anomalies. We believe the application of modern exploration techniques can unearth the potential of this district scale opportunity.”
Under the alliance, both companies will enter a 50:50 joint venture over any project/s approved for further exploration.
Encounter holds the option to maintain its 50 per cent interest by co-funding its share of exploration expenditure.
However, if Encounter decides not to contribute on a 50:50 basis then Newcrest can increase its interest to 80 per cent by sole funding further exploration activities and delivering a JORC compliant resource greater than one million ounces of gold.