Greatland Gold (LON: GGP) said Tuesday that it has entered a farm-in and joint-venture agreement with Rio Tinto (ASX, LON: RIO) to speed up exploration across a tenure near the Havieron gold-copper project in Western Australia.
The mining company said the land package, located within the gold and copper-rich Paterson Province, hosts several under-explored anomalies similar to Havieron, its existing gold discovery in the area.
Greatland already holds licences adjacent to the properties through its joint venture with Newcrest (ASX, TSX: NCM), which is also its partner at Havieron, and which is soon to be acquired by the world’s top gold producer, Newmont (NYSE: NEM)(TSX: NGT) in a $19.2 billion takeover deal.
The development and exploration company is entitled to a 75% interest in Rio Tinto’s 100% owned Paterson South project under a two-stage farm-in deal.
In the first phase of the farm-in, Greatland can earn a 51% interest in Paterson South project by spending A$7.1 million ($4.7m) in exploration, as well as drilling 7,500 metres within four years.
Under stage two, Greatland is entitled to earn an additional 24% join-venture interest after investing another A$14 million ($9m) on the project.
Initial minimum investment needed is A$1.1 million (about $720,00) as well as 2,000 meters of drilling before 2024 year-end, with exploration work starting this year.
“Our farm-in and joint venture with Rio Tinto is consistent with our strategy of continuing to invest in exploration success, and aligns the companies responsible for the discovery of Havieron and Winu, the two biggest and most significant orebodies found within the Paterson Province since Telfer in the 1970s,” Greatland managing director, Shaun Day, said in the statement.
Separately, Greatland said Australia & New Zealand Banking Group, HSBC Bank and ING Bank Australia had delayed the start date of a A$220 million ($144m) loan for its 30% portion of the Havieron development and replaced the commitment letter with one of support, giving it more financial flexibility.
The company had signed in September last year a commitment letter with the group of lenders for a seven-year proposed debt term.
Greatland Gold said it will only use the funding once the feasibility study being prepared by Newcrest is completed.