Rimfire Pacific Mining NL (ASX:RIM) has taken a big step towards bringing the Fifield Project in Central West NSW to fruition by signing subscription, earn-in and joint venture agreements with Golden Plain Resources Pty Ltd (GPR).
The area comprises 103 square kilometres of highly prospective ground that includes the Sorpresa gold discovery, which to date has a gold and silver resource of 74,300 ounces of gold and 3.4 million ounces of silver at 1.0 g/t and 85 g/t cut-offs respectively.
To invest $1.5 million annually
GPR has committed to an immediate $240,000 equity investment in Rimfire shares at 0.32 cents per share and will invest $1.5 million annually for three years to earn a 50.1% interest in the JV area.
Shares shot up to 0.7 cents yesterday, a new 12-month high and 75% higher than the previous close.
Golden Plain “a strong fit”
Rimfire managing director Craig Riley said: “The company at the end of 2018 announced a dual strategy comprising monetisation of Sorpresa and discovery of a significant economic zone of mineralisation.
“Whilst discussions were held with a number of companies it was determined that Golden Plain Resources is a strong fit as they share a mutual desire to fast track the monetisation of Sorpresa gold discovery whilst in parallel embarking on a significant exploration program in the local area for further mineralisation.
“The company very much looks forward to a rewarding future with Golden Plain Resources.”
Rimfire keeps control
Rimfire will have control of the design and execution of the fieldwork programs to be undertaken during the earn-in period.
Of GPR’s $1.5 million annual investment $1.2 million will be for in-ground exploration and for technical work to obtain mine development approvals in the earn-in area and $300,000 for Rimfire corporate purposes.
Location plan of Golden Plain Resources earn-in area.
Following completion of the earn-in, GPR has committed to fund the development of the Sorpresa project, including Rimfire’s portion.
Rimfire will repay its share of the development costs from operating cash flows.
Partners will form JV
Also, after the earn-in commitments are completed, GPR and Rimfire will form an unincorporated joint venture over the area.
An initial non-refundable instalment payment of $60,000 was made on May 1, 2020, with the balance of the $300,000 Year-1 corporate purposes payment to be made by May 31, 2020.
Rimfire will immediately begin logistical planning for geotechnical, metallurgical, hydrological and sterilisation drilling at Sorpresa while the tender process for selection of a consulting group for Environmental Impact Studies (EIS) will also occur.
The first cash call to fund the technical work program is expected to be issued to GPR in late May.
Riley added: “It is a truly exciting time and I take this opportunity to thank the local community, current and past shareholders, contractors and employees of Rimfire whose support has created the platform for Rimfire to achieve further success in partnership with Golden Plain Resources in the coming years.”
Allotment and issue of the shares for the GPR $240,000 equity investment for 75 million ordinary Rimfire shares will occur on May 19, 2020 and will trigger execution of the Earn-in Agreement.
The company will utilise its placement capacity under ASX Listing Rule 7.1 for the placement shares.