Avenira (ASX:AEV) has signed a binding term sheet allowing Manda Resources to earn up to a 35% interest in the Jundee South Gold Project in Western Australia.
Under the agreement, Manda must sole-fund $10 million of exploration across the project, with wholly owned subsidiary Avenira Gold retaining a 65% interest and operational control.
The transaction settles historical tenement disputes between the two parties, with Manda withdrawing all Warden’s Court objections and forfeiture applications over Jundee South tenements. Manda has also agreed not to lodge or assist competing applications in the future.
The earn-in spans up to 48 months across three stages. Stage one requires a firm commitment of $4 million within 24 months for a 14% interest.
Stage two requires a further $3 million within 12 months for 10%, while stage three requires an additional $3 million within 12 months for an 11% interest.
Under the terms, failure by Manda to complete stage two results in forfeiture of its stage one interest. If Manda completes stage two but defaults on stage three, it retains a 14% interest.
Manda will manage exploration during the earn-in under a joint venture (JV) management committee. Following completion, Avenira Gold will appoint the manager, chair the committee, and hold majority voting control.
The terms provide mutual initial public offering (IPO) subscription rights. Avenira may require Jundee South interests to list on the ASX, with Manda entitled to subscribe up to an exploration-scaled 19.9% cap.
Avenira and its associates also hold rights to subscribe for up to $4 million in Manda’s proposed IPO.
CEO John He says the agreement delivers a ‘positive’ outcome for both companies and establishes a framework to advance exploration at Jundee South.
“The arrangement provides exploration funding while preserving our majority interest in Jundee South, allowing us to focus our resources on advancing the Wonarah Phosphate Project,” He says.
Both parties have 45 days to execute definitive agreements.
Avenira is an explorer and project developer with gold and phosphate assets in Western Australia and the Northern Territory.
Write to Paula Fabe at Mining.com.au
Main image: Avenira
