Kalamazoo Resources Ltd. on Jan. 31 said it signed an ore sale and purchase agreement with Minjar Gold Pty Ltd. to fund the drilling, feasibility study and development of the company's A-Zone project at the Snake Well gold mine in Western Australia.

Under the agreement, the company retains the rights to all minerals other than gold and silver within the mining area not contained within the ore reserve block model, together with all gold and other minerals situated outside the mining area.

Minjar will purchase the ore from Kalamazoo once the decision to mine has been reached. Kalamazoo will be entitled to 60% of the free cash flow generated from the operation.

If Minjar decides not to proceed with mining, it will be obliged to bear all costs up to that point.