Musgrave Minerals Ltd. signed a term sheet with Westgold Resources Ltd. to develop the former's Cue gold project in Western Australia under a profit-sharing deal.

The company will receive 50% of profits from operations that would be financed, managed and operated by Westgold, according to the July 3 release.

The deal only covers the existing JORC-compliant gold resources at the Lena, Break of Day, Jasper Queen, Gilt Edge and Rapier South deposits on Musgrave's wholly owned tenements at Cue, and the company will retain 100% of the exploration interests and upside outside the defined resources.

Musgrave plans to start deeper basement drilling at Lake Austin North in early August as a follow-up to its recently completed gold-focused aircore and reverse circulation drilling program, it said.