Emmerson Resources and Tennant Consolidated Mining Group (TCMG) have expanded their alliance to include the Southern Project Area (SPA) in Tennant Creek, Australia.

The exploration earn-in and joint venture (JV) agreement aims to drive aggressive gold exploration, production and royalty streams.

The firms have already formed a JV to develop the Northern Project Area in Tennant Creek.

The new strategic alliance includes earn-in and JV agreements, which involves TCMG providing $5m in funding to take a 75% stake in the SPA.

A JV can be created following the earn-in phase, enabling Emmerson to either retain its equity position in the SPA or reduce its interest. Emmerson can retain its position by contributing 25% to the exploration programmes or choose not to contribute and pare its interest.

As part of the alliance, the firms entered two mining joint ventures to enhance production from the existing high-grade gold projects and new mines.

It includes a small mines JV, whereby Emmerson will receive free carried, 6% gold production royalty from all small mines.

The agreement also includes a major mines JV with Emmerson immediately receiving a 40% share in any major discovery exceeding 250,000oz gold equivalent.

Emmerson managing director Rob Bills said: “TCMG have demonstrated a track record of meeting their JV commitments and continue to be a valued partner that is working with Emmerson to rapidly recommence gold production and development of the Tennant Creek Mineral Field.

“In parallel, TCMG has consolidated several other projects in the Tennant Creek region and intends to unlock value through building a large, central, modern processing facility. The location and size of this new facility is the subject of current studies.”

Emmerson said that the Southern and Northern Project JVs with TCMG would result in an exploration investment of at least $10.5m over a five-year period.

Tennant Consolidated Mining Group managing director Peter Main said: “Emmerson has a strategic land package in the Tennant Creek Mineral Field with clear production potential, which aligns with our consolidation strategy and establishing a modern processing facility to unlock these stranded assets.”