Evolution can earn a 75% interest in the joint venture area by sole funding $18 million over five years with a minimum expenditure of $4 million to be completed in the first two years.
If Evolution does not spend the entire $18 million within five years Musgrave will retain 100% ownership.
The agreement covers Lake Austin and surrounding exploration tenure but excludes all Musgraves’s existing gold resources (including Break of Day and Lena) and the Mainland option area
As part of the agreement, Evolution has agreed to subscribe for 18.6 million shares in Musgrave at 8.07 cents per share to raise $1.5 million.
The new funds will be used to advance drilling at Mainland, Lena and Break of Day.
Musgrave managing director Rob Waugh said “We are very pleased to partner with Evolution, one of the largest gold producers on the ASX and a highly regarded explorer.
“The JV will fast track exploration and we look forward to leveraging Evolution’s extensive technical knowledge and financial resources with our in-house expertise to accelerate potential gold discoveries at Cue.
“This is a positive result for Musgrave and a strong endorsement of the Company’s projects and upside exploration potential.
“Musgrave will retain its interest in all areas hosting existing gold resources including Break of Day and Lena along with the Mainland option area which totals 172 square kilometres of exploration tenure.
“We welcome Evolution to the share register and the additional funding will support Musgrave’s drilling and discovery efforts on the 100% retained ground.”
Cue - Location plan and new Evolution EJVA area on Landsat image
Evolution vice president Discovery and Business Development Glen Masterman said: “We are excited to be partnering with Musgrave to accelerate exploration of the Cue Project.
“Cue is a quality project which has the ability to generate new drill results that extend previously identified mineralised zones.
“This agreement is consistent with Evolution’s strategy of focusing on orogenic and epithermal deposit styles that can create value through future discovery.”