Newcrest Mining, through its subsidiary Newcrest Operations, has entered into a $65m joint venture (JV) deal with Primorus Investments-backed Greatland Gold for the latter’s Havieron gold-copper project in the Paterson region in Western Australia.
In this connection, the companies have signed an exploration farm-in agreement for the Havieron gold-copper project, which is located 45km east of the Telfer mine, and 500km east of rail and port infrastructure at Port Hedland.
Telfer is a gold-copper mine located in the Great Sandy Desert, which is 100% owned by Newcrest Mining. According to the Australian mining company, the Havieron gold-copper project can potentially supply high grade ore feed to the Telfer mine.
The ore from the resulting joint venture will be processed at Telfer mine should the exploration program and feasibility study are successful, said Newcrest Mining. The farm-in agreement has included tolling principles keeping the aspect in mind, said the company.
Primorus Investments executive director Alastair Clayton said: “We note the deal includes the contemplation of using Newcrest’s existing Telfer Mine as a toll-treat facility to support any future mining opportunities at Havieron, potentially reducing any future large capital expenditure requirements and the many years needed to permit and build a commercial mine.”
During the farm-in period, Newcrest Mining will be the manager of the exploration program and will hold a majority stake in the Havieron gold-copper project.
The company has to make a minimum commitment of $5m over an initial 12 month period to join the project and will potentially earn a stake up to 70% through the $65m investment over a six-year period.
At the end of the farm-in period, the company has the option to acquire an additional stake of 5% in the Havieron gold-copper project at fair market value.
It will also have a first right of refusal, during the farm-in period, over the remaining part of Greatland Gold’s Paterson project, which comprises the Black Hills, Paterson Range East and portions of the Havieron licence.
The company can end the farm-in agreement at any time once the minimum commitment has been met.
Newcrest Mining chief development officer Michael Nossal said: “Greatland Gold’s exploration to date has intersected significant mineralisation only 45km from Telfer’s extensive infrastructure and processing capacity.
“Further exploration at Havieron is in line with our strategy in Australia of looking under-cover and it is becoming more and more evident that the Paterson region is highly prospective for under-cover discoveries. Having existing infrastructure centred in this highly prospective region shows the latent option value embedded at Telfer.”
Earlier this week, Newcrest Mining agreed to acquire 70% stake in the Red Chris copper-gold mine and surrounding tenements in Canada from Imperial Metals for $806.5m.