THE BOURSE WHISPERER: Dampier Gold (ASX: DAU) has informed the market that all conditions have been satisfied for its Farm-In and Joint Venture Agreement (FIJVA) with Ord River Resources (ASX: ORD).
The agreement covers the company’s 100 per cent-owned Plutonic Dome project in central Western Australia.
Dampier Gold said the FIJVA will accelerate exploration and possible development of the project.
The company has framework terms in place for a proposed ore purchase agreement to access the Plutonic mine processing facility, which it expects will enhance the prospect of rapid development of the project.
“The company is pleased that the conditions precedent have now been satisfied allowing the deal to come into effect,” Dampier Gold managing director Richard Hay said in the company’s announcement to the Australian Securities Exchange.
“We look forward to working closely with the Ord team to advance Dampier’s aspiration of progressing the project towards production in the near term, whilst retaining significant shareholder exposure to the upside.
“In addition to testing compelling 3D targets generated by Dampier in 2013, Ord intends to focus on pre-development activities for the K2 and Trident deposits.
“Furthermore, during the term of the FIJVA, Ord will be responsible for all project holding costs, concurrent rehabilitation work and maintaining the tenements in good standing thereby allowing the company to focus on the search for other value-add opportunities.”
Ord River Resources has the right to earn a maximum of 75 per cent interest in the Plutonic Dome project by sole funding expenditure of up to $6 million over 24 months, conditional on satisfying the following expenditure milestones:
The first $2 million Farm In expenditure will entitle Ord to a 30 per cent Joint Venture Interest provided the expenditure is incurred within nine months of the agreement coming into effect;
The next $1 million expenditure will entitle Ord to a further 15 per cent Joint Venture Interest (total 45 per cent) provided the expenditure is incurred within 14 months of the agreement coming into effect;
The next $1 million will entitle Ord to a further 15 per cent Joint Venture Interest (total 60 per cent) provided the expenditure is incurred within 19 months of the agreement coming into effect; and
The final $2 million will entitle Ord to a further 15 per cent Joint Venture Interest (total 75 per cent) provided the expenditure is incurred within 24 months of the agreement coming into effect.
Ord may elect to cease sole funding once the minimum Farm In expenditure of $2 million in nine months is satisfied.