Alloy Resources Ltd. said Jan. 29 that it reached an agreement with Doray Minerals Ltd. to regain a majority interest and assume management control of exploration at their Horse Well gold joint venture in Western Australia.
Under the terms, Alloy increased its interest in Horse Well to 51% from 40% and took management control by paying A$300,000 in cash and issuing 32,258,065 shares worth about A$200,000.
The company will also fund A$1.4 million in expenditures to increase its project stake to 60%.
Doray can elect to contribute or dilute after Alloy has reached a 60% interest in the Horse Well project. If Doray's interest dilutes to 5% or less, it will revert to a 1% net smelter return royalty.
Doray will retain a clawback right if a 1.5 million-ounce resource is defined on the project. Should Doray decide to exercise its right, it will pay Alloy three times the exploration expenditures to gain a 51% stake, while Alloy will have a 49% free-carried interest until a bankable feasibility study is completed.
Alloy plans to define targets to explore at the project, which is expected to begin before the end of the March quarter.
