West Perth-based gold explorer Goldstar Resources NL will acquire an 85 per cent stake in the Walhalla gold project tenement after signing a joint venture agreement with unlisted group Franklin Resources.
West Perth-based gold explorer Goldstar Resources NL will acquire an 85 per cent stake in the Walhalla gold project tenement after signing a joint venture agreement with unlisted group Franklin Resources.
Goldstar will spend $45,000 on exploration in the first year to earn a 25 per cent interest in the project, and would need to spend $100,000 to earn a further 30 per cent within two years.
The company could up its stake in the project to 85 per cent by spending a further $100,000 on exploration within three years.
After increasing its interest to 85 per cent, Goldstar will sole fund all joint venture expenditure until a decision to commence mining operations is made.
Once this decision is made, Franklin must either contribute pro rata to all further joint venture expenditure or, if it elects not to participate, offer its interest for sale to Goldstar, seek to sell it to a third party (subject to the pre-emptive right to Goldstar) or have its interest diluted in accordance with an agreed formula.
If Franklin's interest is reduced to less than 2.5 per cent, the interest will be deemed to have been converted to a 2.5 per cent Net Profit Interest.
The full text of a company announcement is pasted below
Goldstar Resources NL (ASX: GDR) is pleased to announce that it has finalised a farm-in joint venture agreement with unlisted group Franklin Resources ("Franklin") covering a strategic addition to its recently expanded Walhalla Gold Project tenement holding in Victoria's East Gippsland.
The Franklin Resources Joint Venture covers a 34km2 tenement which lies immediately adjacent to the group of new Exploration Licences secured by Goldstar earlier this year following a successful tender application to the Victorian Government (Fig. 1).
The tenement covers the interpreted north-eastern extension of the strategically important Ross Creek Line of mineralisation. This structural feature hosts Goldstar's Eureka and Tubal Cain Projects, as well as the historic Morning Star gold mine, which is located in close proximity to the Franklin Resources ground.
The addition to Goldstar's existing tenement portfolio will increase the Company's total ground position in the Walhalla-Woods Point Goldfield to over 730 square kilometres, further enhancing its long-term regional exploration strategy. New ground acquisitions this year have more than doubled Goldstar's regional tenement position, adding further weight to its asset portfolio in the East Gippsland region.
Exploration and drilling targets for Franklin and other GDR tenements will continue to be generated using historical records and geophysical techniques. Goldstar is, in conjunction with our geophysical consultants, refining selected geophysical techniques to improve exploration targeting for the region.
A drill rig is currently being relocated to the Northern tenements to commence what is anticipated to be a long term commitment to drilling in this portion of Goldstar's holding.
Franklin Resources Joint Venture
Under the terms of the agreement with Franklin Resources, Goldstar can earn its interest in the new tenement in three stages:
- Stage 1 - an initial 25% interest in the joint venture by spending $45,000 on exploration within the first year on access road upgrades, surface mapping, inspection of historic workings and data reviews with the aim of establishing drill targets;
- Stage 2 - a further 30% interest, increasing Goldstar's interest to 55%, by spending a further $100,000 on exploration within two years on surface drilling and, potentially, opening one of the old workings located on the tenement for detailed inspection; and
- Stage 3 - a further 30% interest, increasing Goldstar's interest to 85%, by spending a further $100,000 on exploration within three years.
After increasing its interest to 85%, Goldstar will sole fund all joint venture expenditure until a decision to commence mining operations is made. Once this decision is made, Franklin must either contribute pro rata to all further joint venture expenditure or, if it elects not to participate, offer its interest for sale to Goldstar, seek to sell it to a third party (subject to the pre-emptive right to Goldstar) or have its interest diluted in accordance with an agreed formula. If Franklin's interest is reduced to less than 2.5%, the interest will be deemed to have been converted to a 2.5% Net Profit Interest.
The Joint Venture with Franklin Resources represents a further strategic consolidation of Goldstar's Walhalla tenement holding, following its recent successful tender application to the Victorian Government for a substantial mineral exploration block comprising four Exploration Licences (Fig. 1). With the addition of the Franklin Resources tenement, Goldstar's total ground position at Walhalla will increase to approximately 740 square kilometres.
The new tenement contains numerous historic workings and surrounds the historic Morning Star gold mine, now held by Morning Star Gold NL. Importantly, it covers the interpreted north-western extension of the regionally significant Ross Creek Line (RCL) of mineralisation, as well as other major regional structures and lines of mineralisation. The RCL hosts the Tubal Cain and Eureka dyke bulges, where Goldstar is conducting bulk sampling and drilling activities.
SUMMARY
Commenting on the agreement, Goldstar's Managing Director, Andrew King said. "This Joint Venture with Franklin Resources further advances our regional exploration and growth strategy at Walhalla, and represents an important strategic step for us. Following our recent success in the tender application - which effectively doubled our ground position - we have now added a strategically located tenement which further reinforces our regional exploration strategy."
"We intend to utilise the extensive knowledge base we have built up in the region to underpin our exploration activities on the Franklin Resources ground and to add further value to this area," he added.