Ardea Resources has signed a farm-in deal with goldminer Red 5, which will spend up to $2.3 million to explore two projects in Western Australia.
The deal involves Ardea’s Mt Zephyr and Darlot East projects, close to Red 5’s Darlot operations in the Eastern Goldfields.
Mt Zephyr includes several gold and base metal targets, while Darlot East hosts previously-unmapped greenstones that have seen almost no historical exploration, Red 5 says.
The goldminer can earn a 60 per cent interest in both projects if it spends $1.5 million on exploration within two years, and an 80 per cent interest if it spends a further $800,000 by three years.
The deal brings Red 5’s exploration footprint in WA to nearly 2,000 square kilometres.
The company is planning to establish two separate production hubs in the Goldfields – Darlot and King of the Hills (KOTH).
Red 5 said the farm-in supported its strategy to expand the mineral resource for its Darlot operations, which stands at 10.8 million tonnes at 3.5 grams per tonne of gold for 1.2 million ounces of contained gold.
Managing director Mark Williams said Ardea’s projects were within haulage distance from the Darlot processing plant, which currently operates at 1mt per annum throughput.
“Ardea’s grassroots exploration programs have delineated a series of highly-prospective targets, including the high priority Gale prospect, which shows interesting early-stage analogies to our 4.1Moz KOTH deposit,” Mr Williams said.
He said Red 5 now had a strong growth pipeline of exploration projects.
Its shares were up 1.9 per cent at 2:26pm AEDT to trade at 26 cents, while Ardea shares were up 1 per cent to trade at 47 cents.