Legacy Minerals secures farm-in and joint venture with Newmont Exploration at Bauloora gold project

Legacy Minerals (ASX: LGM) has entered into a $15 million farm-in and joint venture agreement with Newmont Exploration, a subsidiary of Newmont Corporation (NYSE: NEM, TSX: NGT), at its Bauloora gold project in New South Wales.

Under the terms of the deal, Newmont will have the right to earn up to 80% interest in the project over two stages.

The first stage will see the company earn up to 51% after spending a total $5 million on exploration within two years, of which $2 million must be spent within the first year and must include 4,000 metres of drilling.

It will also need to drill test the Breccia Sinter prospect and complete a regional aerial magnetic survey over the project area by year end.

In the second stage, Newmont may earn a further 24% interest in the tenements by spending an additional $10 million and completing a further 8,000m of drilling within 48 months.

If Newmont elects to not make the phase two payment, the company will be deemed to have withdrawn from the joint venture and will dispose of its participating interest.

Legacy will act as operator during the initial earn-in period and earn a 10% management fee.

Exciting development

Legacy chief executive officer Christopher Byrne said the partnership with Newmont is an “exciting development” for Bauloora.

“As these types of projects require systematic work and significant drilling, securing the world’s largest gold mining company as a long-term partner is of huge significance,” he said.

“We will be able to leverage Newmont’s global epithermal expertise and sustain the funding for drilling that Bauloora will require.”

He said the joint venture also provides a “clear pathway to development”, with a loan financing option which will see Legacy shareholders carried through to commercial production.

Epithermal project

Bauloora is a large low-sulphidation epithermal project located in the central part of NSW’s Lachlan Fold Belt which hosts world-class copper-gold orebodies including Cadia-Ridgeway, North Parkes and Cowal.

Legacy has progressively undertaken a systematic exploration program focused on mapping, regional targeting and soil sampling across the 27 square kilometre epithermal vein field.

Maiden drilling

In March, Legacy completed a maiden diamond drilling program at the project’s Mee Mar prospect, where it discovered a highly-mineralised parallel epithermal vein as well as continuous low-sulphidation veins across 1.5km of strike.

Initial results and observations support the belief that there is “significant potential” for a world-class low sulphidation epithermal-style gold-silver deposit at Bauloora.

“The implication is that the veins at this project present an excellent opportunity for the discovery of shallow gold mineralisation,” Mr Byrne said.