ABM signs agreement with Newcrest

Newcrest Mining has struck a preliminary farm-in deal with ABM Resources in relation to the Nedlands-based company’s Euro gold project in the Northern Territory.

Under the non-binding agreement, the two companies will work out a joint venture deal within two months.

Newcrest will be able to earn a 51 per cent stake in the project by spending $6 million on exploration over a four-year period in the first stage.

Newcrest can increase its stake to 75 per cent by spending an additional $6 million within three years of electing to commence the second stage of the agreement.

Newcrest may withdraw during the first stage after spending a minimum $2 million.

After the JV commences, ABM can elect to co-fund all future exploration, or dilute its interest and convert to a 1.5 per cent net profit royalty if the interest dilutes to 10 per cent or below.

The Euro project area covers  about 3,500 square kilometres of exploration licences and applications in the Tanami region of the Northern Territory.

The project is along strike of the Trans-Tanami trend, which is the regional control of major gold deposits in the area, including Newmont’s Callie gold mine.

ABM managing director Matt Briggs said the deal would benefit both companies.

“Newcrest’s entry into the Tanami region of the Northern Territory supports our belief this area will yield Australia’s next major gold discoveries,” he said

“Combining our technical skills to direct a major new exploration program will help accelerate discovery in the region.”

The news comes after St Barbara recently took a 10 per cent stake in ABM as part of a $6 million capital raising. 

Shares in ABM finished down 4.17 per cent at 12 cents each, while Newcrest was down 1.47 per cent at $21.57 at the close.