THE BOURSE WHISPERER: Nullagine goldfields neighbours Northwest Resources and Millennium Minerals have signed a non-binding heads of agreement for a 50:50 joint venture.
The new JV will result in ore from Northwest’s Camel Creek Trend gold deposits being mined and processed by Millennium.
Northwest and Millennium are both developing gold projects in the Nullagine goldfield located in the eastern Pilbara of Western Australia.
Millennium will manage the joint venture, which will not require any up front capital contribution by Northwest.
All ore mined as part of the joint venture will be processed through Millennium’s Golden Eagle treatment plant, which is currently under construction.
The key commercial terms of the Joint Venture are as follows:
– Gold produced from the joint venture will be shared equally on a 50:50 basis.
– All costs associated with mining, processing and administration of joint venture ore will be shared equally on a 50:50 basis.
– As consideration, on signing of the formal joint venture agreement Millennium will pay to Northwest, $1.25 million comprising $250,000 in cash and $1M in Millennium shares. The shares will be issued at a price equal to the 30 day VWAP of Millennium shares prior to the date of issue of the shares to Northwest.
According to the companies’ joint ASX announcement the joint venture will transform Northwest from its current advanced explorer status to that enjoyed by an emerging gold producer.
It will also allow Northwest to focus on developing its core Blue Spec Shear high-grade gold-antimony deposits into an underground gold mine.
The gain from Millennium’s perspective is that the joint venture with Northwest will bolster its Ore Reserve inventory through the addition of shallow, moderate grade oxide feed.
“This is an exciting time for Millennium with construction of the Nullagine gold project on budget and on schedule,” Millennium Minerals chief executive officer Brian Rear said in the ASX announcement.
“This milestone is the first in a series of deals contemplated as part of our medium term regional consolidation strategy.”
Northwest Resources managing director John Merity was also effusive in welcoming the new JV.
“This joint venture provides substantial benefits for both companies,” Merity said.
“Northwest was attracted by the strong track record of Millennium’s management team and we are confident that they will make a success of their project and the joint venture.
“For Northwest, joint venture revenue will underwrite the company’s future and allow us to focus on bringing our high-grade Blue Spec Shear gold-antimony deposits into production as soon as possible in an environment of historically high gold and antimony prices.”