Newcrest spends $90m on Paterson potential with Greatland Gold farm-in deal

Newcrest Mining has signalled a commitment to its low-grade Telfer gold mine in the East Pilbara by striking a $90 million exploration farm-in agreement with Greatland Gold in the highly prospective Paterson province.

The AIM-listed explorer said yesterday it had struck a deal with Australia’s biggest gold producer to potentially hand over a 70 per cent interest in its Havieron prospect, about 45km east of Telfer.

Drilling by Greatland has returned stunning deep intersections at Havieron in recent months, including a 275m intersection at 4.77 grams per tonne gold and 0.61 per cent copper.

The drill hits have added to the buzz about the Paterson province, where Rio Tinto last month revealed impressive exploration results at its much-hyped Winu prospect, 130km north of Telfer.

Under the terms of the agreement, the Sandeep Biswas-led miner will spend $90 million in exploration in stages over six years to secure a 70 per cent stake in Havieron. Ore from Havieron will be toll treated at Telfer if it is decided to mine.

Newcrest exploration boss Fraser MacCorquodale said leveraging the company’s existing operations at Telfer represented an opportunity to create value for both companies and their shareholders.

Telfer has been a marginal proposition for Newcrest, but the Greatland deal highlights its commitment to the asset as well as its existing landholding in the surrounding Paterson province.

Greatland chief executive Gervaise Heddle said the company would benefit from Newcrest’s experience as a developer and producer at Telfer as well as its broader understanding of the geology of the Paterson.

The agreement covers 12 tenements around Havieron but Greatland has also agreed to grant Newcrest first right of refusal of the remainder of its Paterson project.

Newcrest also yesterday expanded its footprint in the prospective Tanami and West Arunta regions in central WA as part of two exploration joint venture deals with minnow Encounter Resources.

The Will Robinson-led greenfields explorer revealed its joint venture agreements with the miner would expand 30 per cent to cover 5900sqkm.

The announcements came a day after Newcrest flagged a $1.1 billion deal to take a majority stake in a Canadian copper and gold mine.

Under that deal, Newcrest will run the Red Chris mine in British Columbia. It is estimated to contain 20 million ounces of gold and 13 billion pounds of copper.

Stuart McKinnon The West Australian

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