Prodigy Gold NL (ASX:PRX) has signed a binding exploration farm-in joint venture agreement with a subsidiary of the world's largest gold miner Newmont Goldcorp Corp (NYSE:NEM) valued at $14.5 million to advance exploration at the Tobruk project in the Northern Territory.
The agreement with Newmont Exploration covers Prodigy’s tenements and tenement applications at Tobruk, which is adjacent to Newmont Goldcorp’s Callie Gold Mine.
Prodigy's managing director Matt Briggs said the company was pleased to be partnering with Nemont Goldcorp to fast-track exploration of the Tobruk project in the Tanami province.
Tobruk location map
He said: “The region is considered the exploration destination of choice for several major gold producers.
“Newmont Goldcorp has a long and successful history in the Tanami area including developing the nearby Callie Gold Mine into a world-class gold deposit.
“We are looking forward to leveraging Newmont Goldcorp’s extensive technical knowledge as work gets underway at Tobruk this quarter.”
An exploration program at Tobruk is scheduled to begin later this quarter in parallel with a 9,600-metre drilling program at Lake Mackay JV Project with Independence Group NL (ASX:IGO).
Briggs added: “Prodigy Gold now has in excess of $33 million in funding agreements from JV partners to accelerate discovery across the company’s entire exploration portfolio, including JV’s with Independence Group and Newcrest Mining Limited (ASX:NCM).
“These JV’s have already generated high-quality targets which are currently being drilled.”
Under the agreement, Newmont Goldcorp will sole fund up to $12 million in exploration expenditure to earn up to a 70% interest in Tobruk and provide a total of $2.5 million cash payments.
The cash payments will be in the form of:
- $1.5 million within 20 business days of signing; and
- $1 million on election to proceed to phase II.
Upon completing phase-I of the earn in agreement, Newmont Goldcorp may elect to increase its interest in the project to 70% by:
- Making an additional cash payment of $1 million within 20 business days of electing to proceed with phase II;
- Spending an additional $6 million on exploration within three years from electing to begin phase II; and
- Defining a JORC resource of more than 500,000 ounces.