Summary
- First Au signed a Farm-In and Joint Venture Agreement with 8Au Pty for the Talga Gold and Base Metals Project
- The completion of milestones will earn up to 80% stake in the Talga Gold and Base Metals Project
- The farm-in agreement is contingent on the completion of 8Au’s IPO by 30 June 2021 and securing necessary shareholder approvals by First Au
First Au Limited (ASX:FAU) announced entering into a conditional binding agreement with 8Au Pty Ltd for a Farm-In and Joint Venture Agreement for the Talga Gold and Base Metals Project, located in East Pilbara region of Western Australia.
Also Read: ASX listed First Au (FAU) commences IP survey at Talga Gold project
Inclusions and Structure of the Agreement
The joint venture partnership allows 8Au to earn up to 80% interest in the Talga project upon successful completion of the listed milestones.
Phase 1: 8Au will gain interests up to 50.1% while First Au retains 49.9%
The expenses relating to the ongoing IP survey at the Razorback Gold Prospect will be reimbursed up to a total of $100,000 to First Au earning 8Au a 10% initial stake in the project.
Additionally, 8Au will be eligible to earn another 40.1% stake following the expenditure of $300,000 towards the defined exploration activities at the project within 1 year of the effective date of the agreement.
Phase 2: 8Au will gain 19.9% interests aggregating to 70% while First Au holds 30%
8Au will be eligible to earn another 19.9% interest in the Talga Project spending $600,000 (including the phase 1 expenditure) towards the defined exploration activities at the project within 2 years from the effective date.
Phase 3: 8Au will gain 10% interests increasing the total stake to 80% while First Au holds the other 20%
8Au will be eligible to earn another 10% interest in the Talga Project spending $900,000 (including the phase 1 and phase 2 expenditures) towards the defined exploration activities at the project within 3 years of the effective date of the agreement. Subsequent to the completion of phase 3, First Au’s stake in the project will be free carried to the decision to mine.
Partner Profile and Synergy
8Au is a privately held firm sharing common directors with the First Au ltd. 8Au anticipates completing an initial public offering in early 2021 and based on the acquisition of asset/interests in numerous mineral projects across Western Australia.
Also Read: First Au Limited (ASX:FAU) releases Assay Results for Diamond drilling program at Gimlet
The assets under the 8Au’s portfolio will include the Talga exploration tenements and multiple proximal exploration tenements. The farm-in agreement between 8Au and First Au is contingent on the completion of 8Au’s IPO by 30 June 2021 and securing necessary shareholder approvals by First Au which would require an independent evaluation of the transaction.
First Au closed at $0.024 a share on 20 November 2020 , with a market capitalisation of $11.83 million.
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All financial information pertains to Australian Dollars unless stated otherwise.
