Legacy Iron Ore (ASX: LCY) is looking to increase its precious metal exposure in the South Laverton gold province in Western Australia, and has signed a term sheet for Yundamindera gold project.
The region hosts Sunrise Dam, Wallaby and Sunrise Dam gold mines within a 30 kilometre radius, which combined have gold resources of around 20 million ounces.
The tenements are in the same area as the company's Mt Celia gold project being just 30 kilometres away providing potential synergies across the projects.
The term sheet covers a contiguous package of gold tenements where recent prospecting has identified high grade gold quartz veining that has no historic workings or drilling.
Importantly a heritage clearance has already been received for the prospect area, with a drilling program to commence upon completion of mapping and statutory approval.
- Under the terms of the term sheet and subject to the completion of due diligence, Legacy Iron or nominee can earn a staged interest in the project area by committing exploration funds of $150,000 and a further $250,000 to earn a 60% and 80% interest respectively.
- Legacy Iron must spend at least $100,000 prior to withdrawal, of which $50,000 is to be expended in direct drilling costs.
- At completion of the earn-in period, the parties will contribute expenditure pro-rata with normal dilution clauses applying. The vendors will remain at a minimum of 10% interest post any dilution.
- In the event a decision is made to commence a Bankable Feasibility Study, the Vendors will contribute in proportion to their interest at the time, or withdraw from the Joint Venture and convert its Joint Venture interest to a 2% Net Smelter Royalty.
- The agreement also provides for the initial payment of some $30,000 cash plus reimbursement for tenement costs, plus $50,000 in fully paid shares in Legacy Iron or its spin off entity.
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