Ausmex Mining Group Ltd. executed a binding term sheet to secure eight tenements in South Australia, covering 1,190 square kilometers, from PNX Metals Ltd.
The company already holds 970 square kilometers in the region, taking its total exploration package to 2,160 square kilometers in the Burra regional gold and copper field, it said Aug. 7.
As part of the initial option fee, Ausmex is required to complete a regional geophysical program at a cost of A$30,000 to A$50,000 over the next 12 months.
The company can earn an initial 60% interest in the tenements by undertaking 1,500 meters of cored drilling within 12 months of exercising the option, and choose to form a joint venture on a 60/40 basis.
Ausmex can earn 90% of the tenements in the second stage farm-in by completing a further 1,500 meters of cored drilling or other exploration within 12 months of completing the first stage.
PNX can choose to continue the joint venture on a 90/10 basis or grant Ausmex the remaining 10% interest for a 2% net smelter return royalty on future production.
"The Ausmex team is planning an extensive exploration program with the technical assistance of the University of Adelaide and Allender Exploration under the current Ausmex partnership agreements," Ausmex Managing Director Matt Morgan said.