- Astro Resources and Nevada Exploration have signed an LOI to accelerate epithermal gold projects in Northern Nevada.
- Both the companies will form a JV limited-liability company after Astro completes a JORC Inferred Resource exceeding 750,000 ounces at a Designated Property.
- Astro will spend US$1.4 million under the strategic alliance.
ASX listed exploration company, Astro Resources NL (ASX:ARO), and Canadian exploration firm, Nevada Exploration Inc, have signed a letter of intent for a strategic alliance.
Both the companies have agreed to terms for this strategic alliance to generate and boost epithermal gold projects in Northern Nevada.
ARO shares traded flat at 0.5 cents at 10:28 AM AEDT today.
As per the LOI, Nevada will provide Astro access its exploration data within the AOI. Moreover, based upon a standard earn-in agreement, Astro will have the first right to use this data to acquire current and future exploration targets for two years.
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On the other hand, Astro will commit to spending US$1.4M on the resulting projects under the strategic alliance. It will spend US$600,000 in Year 1 and $US800,000 in Year 2.
Moreover, any designated property elected by Astro within the two-year term will be subject to agreements. Hence, Astro will have flexibility in allocating US$1.4 million in expenditures across the
Designated Properties, with no minimum spending.
However, after the two-year Strategic Alliance:
- Astro may elect to continue to fund exploration at each Designated Property under no obligation or
- NGE may purchase Astro’s interest in any Designated Property for US$1, if Astro completes less than US$250,000 in annual exploration expenditures at a Designated Property.
Image source – © Pichetw | Megapixl.com
Apart from this, Astro and NGE will form a joint-venture limited-liability company after Astro completes a JORC Inferred Resource, exceeding 750,000 ounces at a Designated Property.
Astro and NGE’s initial participating interest will be 70%/30% or 90%/10% for Designated Projects.
Following the achievement of the Resource, both entities will fund their share of the Project development costs; otherwise, their interest will be diluted. Moreover, if either party’s share cuts below 10%, their interest will be converted to a 2% net smelter return royalty.
Being an Australia based company, ARO is excited to start its journey with NGE, a recognised leader in undercover exploration.