East Star Resources (LSE:EST) and Endeavour Exploration announced they have entered into a binding earn-in and joint venture (JV) agreement to advance gold exploration in Kazakhstan.
Endeavour Exploration, a subsidiary of top gold producer Endeavour Mining (LSE:EDV,TSX:EDV,OTCQX:EDVMF), will have the right to earn up to an 80 percent interest in a new JV company via staged investments.
Stage 1 includes a US$5 million payment within two years, equivalent to a 51 percent interest. If an additional US$20 million is given over three years, its interest will increase to 70 percent.
The last 10 percent will be given to Endeavour if it funds and completes a prefeasibility study.
During the initial phase, East Star will act as manager of the JV.
The area of interest for the partnership includes two proven, underexplored mineral belts.
‘This agreement with Endeavour is a transformational milestone for East Star that validates the quality of our exploration programme and provides a clear pathway to unlock the full potential of our gold exploration strategy,” said East Star Resources CEO Alex Walker in a November 13 press release.
While the JV will focus on gold, East Star is also pursuing copper in Kazakhstan.
Its assets include a volcanogenic massive sulfide deposit with a JORC-compliant resource estimate of 20.3 million metric tons at 1.16 percent copper, 1.54 percent zinc and 0.27 percent lead.
An investor webcast is scheduled for Tuesday (November 18) to discuss the terms of the JV.
Both parties will fund the JV company in proportion to their ownership share after the earn-in period.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
This post appeared first on investingnews.com