Newmont Exploration has struck a $14.5 million joint venture (JV) agreement with Western Australian-based Prodigy Gold over the Tobruk project in the Northern Territory.
The agreement is the second JV Newmont has signed with the junior miner over the past year beside the Euro gold project, which is also situated in the Tanami region.
Both Tobruk and Euro are not only adjacent to Newmont’s Callie gold mine, but also contain structures parallel to the expanded operation.
Newmont, which will take the role of project manager, will sole fund up to $12 million in exploration expenditure to earn up to a 70 per cent interest in Tobruk under the agreement.
The company will also provide Prodigy with a cash payment of $2.5 million after the signing of the JV and on election to proceed to phase two.
Following completion of phase two, Newmont may fund Prodigy Gold’s share of future expenditure and JV costs until commercial production starts at Tobruk and increase its interest to 75 per cent.
Ground work at Tobruk is anticipated to commence in the coming weeks, subject to heritage clearances which are under way. Diamond drilling is scheduled to commence later this year.
“We are very pleased to be partnering with the world’s largest gold miner to fast-track the exploration of our Tobruk project in the Tanami province, a region which is considered the exploration destination of choice for several major gold producers,” Prodigy Gold managing director Matt Briggs said.
“Newmont Goldcorp has a long and successful history in the Tanami area including developing the nearby Callie gold mine into a world-class gold deposit and we are looking forward to leveraging Newmont Goldcorp’s extensive technical knowledge as work gets underway at Tobruk this quarter.”
Newmont also operates a fly-in, fly-out Tanami mine in the Tanami desert since 2002.
Previous exploration at Tobruk was carried out by North Flinders Mines from the late 1980s to 1990s and by Newmont and AngloGold Australia in the early 2000s.