Gold Fields Ltd. agreed to earn up to a 70% joint venture interest in tenements in the western portion of Lefroy Exploration Ltd.'s namesake gold project in Western Australia.
The agreement with Lefroy subsidiary Hogans Resources Ltd. allows Gold Field unit St Ives Gold Mining Co. Pty. Ltd. to secure the interest by spending a total of A$25 million in two stages over six years.
The tenements covered in the agreement make up 372 square kilometers of the total 577 square kilometers of the Lefroy project and are adjacent to Gold Fields' St Ives gold operations.
Gold Fields will manage all exploration activities during the farm-in period and is required to spend at least A$4 million within two years, after which it can choose to withdraw.
If the company chooses to process its share of gold ore through the St Ives mill, Lefroy will also receive the option to process its ore at St Ives on commercial terms.
Lefroy will focus exploration at the 205-square-kilometer eastern portion of the project.
As part of the deal, Gold Fields also secured an option to acquire up to 8,014,535 shares in Lefroy if it conducts an equity raising within the next six months.
In late May, Gold Fields CEO Nick Holland said it is putting acquisition plans on hold for a year to focus on its existing operations and nearby prospects.
