THE BOURSE WHISPERER: Mithril Resources (ASX: MTH) announced it has executed a Farm-in and Exploration Joint Venture Agreement with Western Australian gold miner Doray Minerals (ASX: DRM).
Under the new deal Doray will be entitled to earn up to an 85 per cent interest in Mithril’s recently-granted Duffy Well gold project by reimbursing the latter’s tenement acquisition costs and completing exploration expenditure of $500,000 over three years.
Duffy Well (EL51/1649) is in Doray’s neighbourhood, being located 30 kilometres east of Meekatharra in WA.
It covers the interpreted southern extension of the Gnaweeda Greenstone Belt where Doray intersected high-grade gold mineralisation in June from RC drilling at the Turnberry prospect, including:
3 metres at 10.1 grams per tonne gold from 149m;
5m at 17.4g/t gold from 71m; and
4m at 17.9g/t gold from 45m.
Mithril has completed a review of previous exploration at Duffy Well, comprising reconnaissance RAB and aircore drill traverses with little or no follow-up, from which it identified two gold-prospective areas for initial follow-up.
“Lying within the northern and central portions of the project, both areas are characterised by zones of structural complexity within favourable greenstone rocktypes,” Mithril said in its ASX announcement.
“The areas have also returned coincident bedrock gold (+50ppb) and arsenic (+100ppm) anomalism within widespaced drillholes.”
Doray Minerals has indicated it intends carrying out a field inspection of the two targets before the end of the December 2015 Quarter.
The terms of the Farm-in and Exploration Joint Venture Agreement are as follows:
Doray will reimburse Mithril its tenement acquisition costs – $22,634 (inclusive of GST).
Doray can earn an initial 51 per cent interest by completing expenditure of $300,000 within two years.
Doray can elect to earn an additional 34 per cent interest through further expenditure of $200,000 over a further year (in total 85 per cent by spending $500,000 over 3 years).
If Doray elects not to earn a further 34 per cent interest, then Mithril has the right to contribute on a pro rata basis or dilute as per an industry standard formula.
Once Doray has earnt its 85 per cent interest, Mithril has the right to contribute on a pro rata basis or dilute as per an industry standard formula. If Mithril’s interest dilutes below 10 per cent it will be deemed to have withdrawn and will be entitled to receive a 1.5 per cent Net Smelter Royalty on all Precious and Base Metals.
Doray is required to keep the tenements in good standing at all times and can only withdraw after it has spent a minimum of $100,000 in the first year.
The agreement is subject to both parties obtaining Ministerial Consent within 30 days of executing the Agreement (Condition Precedent).