Greatland Gold shares (LON:GGP) ticked up on Tuesday after the company announced it had secured a £65 million farm-in agreement.
The natural resources exploration company said it had reached a farm-in agreement with Newcrest to advance its Havieron project in the Paterson region of Western Australia.
Greatland Gold also said that during the farm-in period, Newcrest will have a first right of refusal over the remainder of its Paterson project.
According to the agreement, Newcrest now can acquire up to a 70% interest in Havieron by spending up to $65 million, alongside ‘completing a series of exploration and development milestones in a four-stage farm-in’ over the course of six years.
Following this, Newcrest will also have the opportunity to acquire an additional 5% interest ‘at fair market value’, which would result in Newcrest’s interest rising to 75%.
Newcrest is set to assume the role as Manager during the Farm-in period. Meanwhile drilling is expected to start again in April 2019.
Gervaise Heddle, Chief Executive Officer of Greatland Gold, commented: “We are delighted to welcome Newcrest as our chosen partner for accelerating the exploration and development of Havieron. Greatland will receive tremendous benefit from Newcrest’s experience as a developer and producer at Telfer and Newcrest’s broader understanding of the geology of the Paterson region.
He added: We believe that this deal represents a win-win for both parties due to the potential for significantly reduced capital costs and increased efficiency resulting from ore being toll processed at Newcrest’s nearby Telfer mine. Moreover, Newcrest’s expertise should help fast track Havieron through to a completed Feasibility Study and, subject to positive outcomes, into production and positive cash flow.”
Last month, Greatland Gold shares soared after the firm confirmed “excellent results” from its Haiveron drilling campaign.
At the time, the firm said that the results indicate that the site exhibits the potential ‘to become a large, multi-commodity, bulk tonnage, underground mining operation’.
Shares in the AIM-listed firm are currently trading +20.44% as of 12:33PM (GMT).