Encounter Resources gets cosier with gold major Newcrest; shares up 14pc
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Junior explorer Encounter Resources has broadened its partnership with Australia’s biggest gold producer Newcrest Mining.
The two companies have agreed to five new joint ventures in the Tanami and West Arunta regions of Western Australia – a deal that will give Encounter (ASX:ENR) a $1 million cash injection.
Shareholders responded well to the news, pushing the share price up 14 per cent to 7.4c in early Thursday trade.
Encounter already has in place a “project generation alliance” with Newcrest (ASX:NCM) covering the West Tanami tenements. The alliance runs until July this year.
This new agreement covers 4400 sq km and includes the Selby, Watts, Lewis, Phillipson and Aileron projects.
“The Tanami region of Western Australia ticks so many boxes,” Encounter managing director Will Robinson told investors.
“Limited prior shallow drilling has outlined footprints of several potential major mineral systems.
“Aileron and Phillipson are genuine first mover opportunities in untested regions where new data is opening up mineral exploration.”
Mr Robinson told Stockhead the partners are currently prioritising several targets for drill testing.
“There’s some really obvious walk up drill targets on a number of these joint ventures, where we’ve got high-grade gold intersections within 100m from surface that are part of very large mineral systems that have been defined,” he said.
“As the tenements get granted over the next couple of months we’ll get on the ground and start the exploration.”
Each joint venture gives Encounter the option of advancing to a 50/50 production partnership or selling down its stake to 20 per cent and having Newcrest sole fund exploration.