Australia-based Legacy Minerals and Newmont Exploration signed a A$15m ($10m) farm-in and joint venture (JV) agreement for the former’s Bauloora epithermal gold project in New South Wales, Australia.

The agreement is subject to the Newmont subsidiary spending A$2m ($1.34m) within 24 months along with undertaking a regional aerial magnetic survey of the tenements and drill testing at the Breccia Sinter prospect, both by the end of this year.

Under the terms of the agreement, Newmont Exploration can earn a 51% interest in the Bauloora project by spending A$5m ($3.34m) within 48 months.

During phase 2 of the earn-in agreement, the Newmont subsidiary can acquire a further stake of 24% in the tenements by spending A$10m ($6.7m).

Newmont Exploration is expected to undertake 4,000m of drilling at the Bauloora epithermal gold project within 48 months in the first phase and a further 8,000m within 48 months in the second phase of earn-in.

According to Legacy Minerals, the company will act as the operator of the Bauloora gold project during the initial earn-in period.

A mining JV between the companies could be formed upon the decision to mine.

Legacy Mining might enter into an agreement to a loan carried through to production via a financing facility from Newmont allowing the latter to earn-in up to 80% of the Bauloora gold project.

Located in the Lachlan Fold belt, Bauloora is a large and underexplored, low sulphidation epithermal project.

Legacy Minerals CEO and managing director Christopher Byrne said: “This partnership with Newmont is an exciting development for both Legacy Minerals and the Bauloora Project.

“It confirms our belief, through the systematic work completed by our exploration team to date, that this system has the potential to host a world-class epithermal system.

“As these types of systems require systematic work and significant drilling, securing the world’s largest gold mining company as a long-term partner on the Project is of huge significance.

“The partnership allows us to leverage Newmont’s global epithermal expertise and sustain the funding for drilling that Bauloora will require.”