PERTH and JOHANNESBURG (miningweekly.com) – London-listed Acacia Mining and ASX-listed OreCorp have entered into a joint venture (JV) agreement to advance Acacia's Nyanzaga exploration project, in Tanzania.

Under the terms of the agreement, OreCorp would provide Acacia with a $1-million upfront cash payment, followed by staged earn-in expenditure of $14-million and the completion of a definitive feasibility study (DFS) to earn an initial 25% interest in the project.

It would take over sole management of the project for a three-year period, with a technical committee, comprising Acacia and OreCorp representatives, overseeing all work on the project.

If the DFS portrayed a project with a net present value (NPV) of greater than $200-million, Acacia had the option of retaining its 75% stake and reassuming management of the project for development purposes by making a one-time payment to OreCorp based on a multiple of the earn-in expenditure incurred, ascertained on a sliding scale basis.

If Acacia declined to exercise its option, or if the NPV was less than $200-million, OreCorp would have the option to acquire another 26% stake, bringing its ownership to 51%, for $15-million.

Acacia CEO Brad Gordon said the structure of the JV allowed the miner to continue its focus of delivery from its existing mines, while retaining the optionality to participate in the potential future development of a large-scale gold mine.

OreCorp described the Nyanzaga transaction as ideal for the company, stating that it would allow the junior to leverage off its great depth of experience in both Tanzania and the development of mineral deposits in Africa.

“The board believes that Nyanzaga presents an exciting opportunity on favourable terms at a low point in the resources cycle, with potential to add significant value going forward,” the company said.

The Nyanzaga project comprises 27 contiguous prospecting licences covering a combined 299 km².

The project currently has an in-pit inferred resource estimate of 4.2-million ounces, grading at 1.3 g/t gold, with over 237 000 m of drilling already completed at site.

Additional regional prospects and targets had already been identified on the JV tenement and the JV was expected to have low upfront entry costs.

Reporting by Esmarie Swanepoel and Natasha Odendaal