The Con mine, in the Yellowknife mining camp.
Photo by: Alan Sim (via Flickr)
TSX-V-listed Gold Terra Resources on Tuesday announced an exploration agreement with gold major Newmont, which could see the junior earn into ground adjacent to the former Con mine, in the prolific Yellowknife mining camp.
Gold Terra executive chairperson Gerald Panneton said the agreement with Newmont reflected the shared vision of two companies with the same goal, ‘find more gold’.
“Our agreement allows Gold Terra to better explore the southern extension of the prolific Con mine, where approximately 5.1-million ounces of gold was produced from the Campbell Shear between 1946 and 2005 at a grade of 15 g/t, and over widths of up to 100 m. With this transaction, Gold Terra secures the immediate southern extension of the Campbell Shear mineralisation, which is immediately north of our 100% owned South Belt property."
The agreement contains two phases of potential earn-in. In Phase 1, Gold Terra can earn a 30% interest by spending a minimum of C$3-million in exploration expenditures over a period of three years on the Newmont exploration property. Gold Terra will manage, fund and operate the programme. Upon completing Phase 1 earn-in, the parties will form a joint venture (JV).
In Phase 2, Gold Terra can earn an additional 30% interest, for a 60% cumulative interest in the JV, by sole funding all expenditures and completing a prefeasibility study outlining a mineral resource containing at least 750 000 oz of gold on the Newmont exploration property itself, and a combined 1.5-million ounces of gold on both the Newmont exploration property and the mineral claims in the immediate area which are already owned by Gold Terra. Gold Terra has a period of up to four additional years to complete Phase 2 earn-in and would also manage and operate the Phase 2 programme.
Provided that Gold Terra completes Phase 2 earn-in, Newmont has a one-time, back-in right to earn back a 20% interest in the JV, such that Newmont would then hold a 60% interest and Gold Terra would hold a 40% interest.
The back-in right is triggered if a discovery of at least five-million ounces of gold in all mineral resource categories is made within the Newmont exploration property and is exercisable by Newmont by providing certain cash reimbursements and payment to Gold Terra.
Gold Terra said it would initiate a drilling programme by year-end on the Newmont exploration property.