Novo Resources Corp. entered a preliminary, binding memorandum of agreement to farm-in to gold rights at Artemis Resources Ltd.'s 1,536-square-kilometer exploration package in Western Australia's Pilbara region.
Novo noted that it recently entered an agreement to acquire the Comet Well gold property in the same region, also targeting conglomerate-hosted gold mineralization.
The company can earn 50% of the gold rights at Artemis' current and future tenements within 100 kilometers of Karratha by spending A$2 million on exploration within two years.
The deal includes Artemis' Purdy's Reward, Weerianna, Carlow Castle and Nickol River projects.
During the farm-in phase, Novo will sole fund gold exploration and will decide how the A$2 million will be spent, according to the May 26 release.
Following completion of the farm-in, Novo and Artemis will form a new 50/50 joint venture to explore for, develop and mine conglomerate and/or paleoplacer style gold mineralization.
The companies will equally contribute under the joint venture, with a failure to contribute resulting in a dilution of interest comprising 1% for every A$500,000 not contributed. If either party's interest drops below 5%, it will be converted to a 0.5% net smelter royalty.
Novo and Artemis will assess the potential of utilizing Artemis' 425,000-tonnes-per-annum Radio Hill treatment plant to process ore from any new gold mine pursued by the joint venture.
A recent independent review of the Radio Hill plant outlined costs of A$5.3 million to upgrade and refurbish the facilities, which was less than Artemis had expected.