Evolution Mining Ltd. may earn a 75% stake in the Lake Austin area of the Cue gold project in Western Australia by sole funding A$18.0 million over five years, as the company has signed an earn-in and exploration joint venture agreement with Musgrave Minerals Ltd., the companies said in separate statements on Sept. 17.
Under the agreement, Evolution must complete a minimum expenditure of A$4 million in the first two years. If Evolution fails to spend the total A$18 million within five years, Musgrave will retain full ownership of the property.
Evolution has also agreed to subscribe for 18,587,361 Musgrave shares at 8.07 Australian cents apiece, set at the company's 30-day VWAP of shares, to raise A$1.5 million, which will be used to advance drilling at Mainland, Lena, and Break of Day, in which Musgrave will retain full ownership.
If a company's stake in the joint venture area dilutes to below 10%, that party's interest will be automatically converted to an 8% net profit interest on any minerals produced and sold from the area, capped at A$20 million.
Meanwhile, Evolution also said that it has entered into an earn-in deal with private company Basin Gold Pty Ltd. over the Crush Creek gold project in Queensland, Australia. Evolution believes that this project has potential to extend the life of mine of the Mount Carlton gold project.
Under this deal, Evolution has to pay an initial A$2.0 million to Basin on grant of the mineral development license, and can earn 70% interest in the project by sole funding A$7.0 million in exploration over a two-year period.
Once the earn-in is completed, either company has the option to elect for Basin Gold's 30% interest to be sold to Evolution for a consideration of A$4.5 million and a 10% net profit interest on any production above 100,000 ounces of gold.
