Perth-based gold miner Northern Star has signed a joint venture agreement with Fortescue Metals Group to acquire non-iron ore mineral rights to what it described as "barely explored" acreage near several Fortescue mines.
Northern Star will pay $2 million upfront for an immediate 25 per cent interest in a number of tenements, many of which sit near mineral-rich areas at Fortescue's Paulsens, Mt Olympus and Electric Dingo projects.
It will have the right to earn another 35 per cent interest if it spends a further $4 million within two years.
The deal will leave Northern Star with a 7,000 square kilometre tenement package of land.
After the initial 60 per cent earn-in, Fortescue must co-contribute otherwise they will dilute down, to an eventual 2 per cent net smelter return.
The deal is conditional on Fortescue securing native title party consent to the grant of the rights and approval from its financiers.
Northern Star managing director Bill Beament said the Fortescue tenements were "the final pieces of the jigsaw", giving the company an extensive land holding in one of Australia's most prospective gold regions.
"Two deposits of about 1Moz each have been discovered on our acreage along with a series of other mineralised targets and yet there has been little or no exploration in this area by the standards of other Australian gold provinces," he said.
"Given the combination of the deposits we know about in this area and the lack of exploration undertaken, we believe this region boasts some of the most promising upside in the Australian gold industry."
Shares in Northern Star were down slightly at the close to $1.20.