Encounter Resources secures five-star exploration opportunity with Newcrest Mining

Newcrest Mining ASX NCM Encounter Resources ENR exploration gold

Micro-capped Encounter Resources (ASX: ENR) has surprised the market by announcing a series of joint-ventures with one of Newcrest Mining’s (ASX: NCM) subsidiaries.

However, Newcrest will retain the manager’s role of all the ventures initially with Encounter retaining an option to maintain its 50% interest by contributing to its share of exploration expenditure.

According to early indications, Encounter will make its decision after reviewing the first joint venture budget for each project sometime over the next few months.

The junior explorer said that if it decides not to contribute on a 50:50 basis on any of the five joint ventures, Newcrest will have the option of increasing its interest to 80% by sole funding exploration activities.

In this case, Encounter expects the large-cap major to deliver a JORC inferred resource of greater than 1 million ounces of gold or gold equivalent.

Encountering a strong portfolio

Encounter currently holds a significant portfolio of exploration assets in the Paterson Province in WA, in search of gold-copper deposits in the Telfer region.

The gold junior also has a highly prospective land package in the Tanami region to be explored via five joint ventures with Newcrest, making the micro-capped explorer one of the most active greenfield exploration companies in Australia.

Newcrest is one of Australia’s most prominent mining companies with the JV agreements representing a strong opportunity for Encounter to make strong explorational progress and raise its fledgeling market footprint in the process.

Today’s news means Encounter has entered five separate unincorporated joint ventures covering a total of 4,400 square kilometres of the Tanami gold province and West Arunta in Western Australia.

The five prospects are Selby, Watts, Lewis, Phillipson and Aileron. The agreements will see Encounter receiving around A$1 million in additional funding, depending on explorational progress.

Newcrest will make a A$100,000 payment to Encounter following execution of the Phillipson joint venture agreement. Later this year Encounter expects to receive a further payment of A$400,000 upon the grant of tenement E80/5045 sometime in July 2018.

Finally, Encounter will receive a further payment of A$500,000 if Newcrest elects to continue activity on tenement E80/5045 after a 12-month period in which time both companies can evaluate the tenement and conduct explorative drilling.

The next steps are now expected to involve compilation and interpretation of existing data. Encounter says that historical exploration is “well advanced” and ongoing with target prioritisation now being fast-tracked by a technical committee.

Joint venture tenement applications are expected to be granted over the next few months with field exploration activities to commence shortly thereafter, according to Encounter.

“The Tanami region of Western Australia ticks so many boxes,” said Will Robinson, Managing Director of Encounter Resources.

“It is a true district scale opportunity where new datasets provided by the Geological Survey of WA have significantly enhanced prospectivity. Aileron and Phillipson are genuine first mover opportunities in untested regions where new data is opening up mineral exploration. We are excited to be fast-tracking exploration via joint ventures with Newcrest, Australia’s largest gold company, which can be fully funded by Newcrest if Encounter so elects,” said Mr Robinson.

News of today’s five JV agreements saw Encounter shares rise by over 12% and trading at A$0.073 per share by mid-afternoon.

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