Lachlan Star snares Newmont Mining as partner for Australian copper project

Lachlan Star (ASX: LSA) has engineered a deal to allow the company to focus more on the gold producing operations of the CMD Gold Mine in Chile.

Lachlan Star has entered a farm-in agreement with world's largest gold producer Newmont Mining Corporation (ASX: NCM) at the Bushranger Copper Project in New South Wales.

Mick McMullen, executive chairman of Lachlan Star, commented “This agreement enables the company to focus its finances and management time on its 100% owned operating CMD Gold Mine in Chile, whilst exploration at Bushranger is continued by a major such as Newmont."

Importantly for Lachlan Star at the completion of the farm-in period, the company will have the option to fund its 49% share of the joint venture, providing exposure to the asset should Newmont deliver some significant developments.

Lachlan Star also has the option on the table to dilute further, providing some optionality on the project.

McMullen added, "Newmont is one of the world’s largest gold producers and is the only gold company included in the S&P 500 Index and Fortune 500 and to have them as a partner on our exploration assets in Australia is very encouraging."


The terms of the agreement are:

Newmont will have a 12 month option period to evaluate the Bushranger Copper Project, during which time it must spend a minimum of A$250,000.

At any time during that 12 month period, Newmont can elect to exercise the option, and earn a 51% interest in the project by spending a total of A$1 million (including expenditures during the option period) over a period of 2 years from the date of the agreement.

At the completion of the farm-in period, Lachlan Star and Newmont will form a joint venture owned 49% and 51% respectively, with both parties funding exploration and development on a pro rata basis. Either party may elect to dilute during the joint venture.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/20189/lachlan-star-snares-global-giant-newmont-mining-as-partner-for-australian-copper-project-20189.html