JOHANNESBURG (miningweekly.com) – ASX-listed Emmerson Resources has entered into a binding agreement with Ivanhoe Australia to form an exploration farm-in and joint-venture (JV) to fast track the discovery of deposits at Emmerson’s Tennant Creek, in the Northern Territory.

A number of prospective gold-copper targets had already been identified by Emmerson within the Tennant Creek tenement package.

Under the terms of the agreement, Ivanhoe would have to sole fund expenditure of $18-million on exploration, over a three year farm-in period. In return, it would earn a 51% interest in the majority of Emmerson’s tenement package.

Ivanhoe had to spend a minimum of $7,5-million during the farm-in period, but would not earn any equity until it met the $18-million target.

After completing the farm-in, Ivanhoe also had to sole fund an additional $10-million on exploration within a five year period, to maintain its 51% interest.

Additionally, Ivanhoe has to sole fund projects over 500 000 oz gold to earn a 70% interest upon these projects reaching a minimum of one-million ounces gold.

Any ‘Tier 2’ projects identified within the JV area, with less than 250 000 oz gold equivalent, would be retained by Emmerson.

Emmerson could, at any stage of the farm-in or JV, sole risk and sole fund projects that were not being explored by the JV, however, if any exceed the 250 000 oz gold hurdle, Ivanhoe would have a clawback option.

Emmerson would be the operator of the JV and conduct exploration programmes, which would would be directed by an exploration management committee, consisting of three representatives from Ivanhoe, and two from Emmerson.

Meanwhile, Ivanhoe has agreed to subscribe for about 22,61-million Emmerson shares, at a price of 13 c a share, to raise $2,9-million.

The share placement was being undertaken at a 24% premium to the one-month volume weighted average price, and a 41% premium to the three-month volume weighted average price.

Following the completion of the placement, Emmerson would have cash reserves of about $13-million.