PERTH (miningweekly.com) – ASX-listed junior Ord River Resources has signed a farm-in and joint venture (JV) agreement with fellow-listed Dampier Gold over the Plutonic Dome project, in Western Australia.

Under the terms of the transaction, Ord River would sole fund up to A$6-million over the next two years, to earn a 75% interest in the gold project. The farm-in agreement requires Ord River to spend a minimum of A$2-million in the first nine months, to earn an initial 30% stake.

Ord River would act as project manager for the sole-fund period, after which the party holding the highest JV interest would be the manager.

“This transformational agreement marks the beginning of Ord River's strategy to enter into the million-ounce-plus gold resource category and moves Ord River forward towards becoming a producer in the future,” said MD Frank Zhu.

He noted that the Plutonic Dome project comprised 56 granted minerals titles covering more than 400 km². The project currently has a mineral resource of some 5.5-million tonnes, grading 3.8 g/t gold for 683 00 oz of contained gold.

Dampier’s project area produced some 580 000 oz from 40 openpits between 1990 and 2005.

MD Richard Hay stated on Tuesday that the board's decision to bring in a partner to share the risk of the Plutonic Dome development was the best development course, considering the potentially highly dilutive alternatives available to junior mining firms looking to gain access to capital.

“Over the past few months, the company has been reviewing the results of its three-dimensional prospectivity model recently developed for the entire Plutonic-Marymia greenstone belt. A number of high priority targets have been identified and undergone preliminary evaluation. Significant expenditure is now required to effectively drill test these targets.”

Hay added that Ord River would address high priority targets in its work programmes.

Dampier, in turn, would focus on applying its financial strength towards the search for other value-added opportunities.