Australia-based Legacy Minerals and Newmont have signed a farm-in deal for the former’s Bauloora epithermal gold project in New South Wales, Australia.

According to the agreement, Newmont subsidiary Newmont Exploration will spend $1.34m (A$2m) within 24 months.

It will also undertake a regional aerial magnetic survey of the tenements and a drill test at the Breccia Sinter prospect by the end of this year.

Upon satisfying these minimum commitments, Newmont Exploration will have the option to earn a 51% interest in the Bauloora project by spending $3.34m (A$5m) within a period of 48 months.

Newmont will also undertake 4,000m of drilling at the project within 48 months.

Legacy Minerals will act as the operator of the Bauloora gold project during the initial earn-in period.

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By GlobalData

During the second phase of the earn-in agreement, Newmont Exploration can earn a further 24% stake in the Bauloora project by spending an additional A$10m ($6.7m) and carrying out a further 8,000m of drilling within 48 months.

The two companies will then form a mining joint venture upon the decision to mine the Bauloora low-sulphidation epithermal project, which is located in the Lachlan Fold belt.

In addition, Legacy Mining is expected to sign an agreement to a loan carried through to production via a financing facility from Newmont Exploration, allowing the subsidiary to earn-in up to 80% of the Bauloora gold project.

Legacy Minerals CEO and managing director Christopher Byrne said: “This partnership with Newmont is an exciting development for both Legacy Minerals and the Bauloora Project.

“It confirms our belief, through the systematic work completed by our exploration team to date, that this system has the potential to host a world-class epithermal system.

“The partnership allows us to leverage Newmont’s global epithermal expertise and sustain the funding for drilling that Bauloora will require.”