AEX Gold and ACAM plan to create a joint venture (JV) for exploring and developing the former’s strategic mineral assets in Southern Greenland.

The parties have signed a non-binding heads of terms agreement to create a special purpose vehicle (SPV) in this regard and make a combined contribution of £36.7m.

ACAM, which is a natural resource focused limited partnership, is expected to invest £18m for a 49% stake in the SPV. AEX Gold will hold the remaining 51%, subject to negotiation of the final terms of the JV.

Under the terms of the agreement, AEX Gold is likely to contribute its strategic non-precious mineral licences, that are non-gold. The miner will also make £18.7m worth contribution to the JV in the form of site support, logistics, and overhead costs related to using its existing infrastructure in Southern Greenland.

AEX Gold said that an option for further funding of £10m in the future is to be available on achieving agreed milestones.

The funding offered to the SPV from ACAM will help in advancing the exploration for and identification of strategic minerals across various existing prospective gold targets of AEX. These include Sava and North Sava, Paatusoq, Stendalen, Kobberminebugt, and any other future strategic mineral discoveries made on the latter’s licences.

Sava and North Sava are said to hold the potential to host mineralisation of iron oxide, copper gold (IOCG). Paatusoq is a rare earth elements (REE), niobium, tantalum, zirconium project, while Kobberminebugt hosts various copper-gold showings.

Stendalen is believed by AEX Gold to host iron-vanadium-titanium mineralisation.

AEX Gold CEO Eldur Olafsson said: “This JV will enable us to invest the capital required to bring these strategic mineral targets up the value curve towards future production and also enable us to explore the wider area to identify further non-precious strategic mineral assets.

“The investment AEX has made in its management team, camp, infrastructure, logistics support and local relationships gives us the ability to deliver on this exciting, ambitious and high potential value work programme.”

AEX Gold will keep managerial and operational control of the JV as well as the planned exploration campaign. All of the company’s gold assets will not be part of the JV and will continue to be 100% owned by it.

The JV will be subject to the signing of definitive documentation between the parties.