Stone Resources Australia announced that it has entered into a Binding Heads of Agreement with MHM Metals Limited to develop the wholly owned Brightstar Gold Project located in the Laverton region of Western Australia.
Under the terms of the agreement, the joint venture is to be managed and operated by MHM, who will earn an initial 50% interest through spending $7.5 million development capital on the project. The company will also have the option to increase its interest in the project to up to 80% through spending additional $10.5 million.
The JV includes the 350ktpa Brightstar gold treatment plant – currently under care & maintenance – along with all associated infrastructure such as power gen-sets, laboratory, camp accommodation and assorted mining equipment.
The Brightstar Gold Project covers an area in the excess of 300 square kilometres and includes the Alpha, Beta, Gamma, Ben Hur, King of Creation and Cork Tree Wall gold deposits.
According to the ASX announcement by Stone Resources, the transaction is conditional upon MHM completing due diligence to its satisfaction and both parties obtaining all necessary shareholder and regulatory approvals.
“Both parties have agreed to use reasonable endeavours to negotiate, finalise and execute a Formal Agreement to document the joint venture transaction by no later than 19th February 2016,” reads the announcement.