Gold Fields has commenced an airborne gravity survey at Killi Resources’ West Tanami gold project in the Kimberley region of Western Australia.
The 1600km² airborne gravity survey will conducted along the Tanami gold belt at West Tanami and is considered to be the first step in Gold Fields earning a significant stake in the project.
Gold Fields first entered into an option and joint venture agreement with Killi in May. Under the agreement, Gold Fields can a 60 per cent interest in West Tanami by incurring at least $2 million in expenditure on the project within two years of the agreement’s execution.
During the earn-in period, Gold Fields must assume West Tanami’s costs and management from the agreement’s execution.
Gold Fields may also earn a further 25 per cent interest in West Tanami by incurring an additional $8 million in expenditure within seven years of the agreement’s execution, bringing Gold Field’s stake to 85 per cent and total exploration spend to $13 million.
“We are thrilled to have a partner in Gold Fields at the West Tanami project,” Killi chief executive officer Kathryn Cutler said in May.
“This partnership allows access to expertise and funding for the longer-term and will ensure the project continues its progress in pursuit of a new orogenic gold system in the Tanami.”
Once the earn-in period has concluded, Killi’s joint venture interest may be diluted if it doesn’t contribute the funds equal to its interest.
If Killi’s interest is diluted to 10 per cent, Killi can choose to either recommence its contribution to the joint venture expenditure to maintain its interest or have its interest diluted to zero per cent.
If the latter takes place, Gold Fields will grant Killi a one per cent net smelter return (NSR) over West Tanami. If the NSR is granted, Gold Fields may elect to further dilute it to 0.5 per cent via a $5 million payment to Killi.
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