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The JV is over Hammer’s Overlander, Even Steven and Dronfield iron oxide-copper-gold targets, which make up around 250sq.km of the company’s 2011sq.km Mount Isa project.
Newmont can earn 35% by spending $1.45 million within two years, including at least $500,000 in the first nine months.
It can move to 65% by spending another $3 million over a further two years and can reach 75% by spending $6 million or completing a feasibility study, if Hammer chooses not to contribute.
Newmont can earn 80% by financing Hammer’s share of future expenditure until the start of production, with Hammer to repay the funds through project cashflow.
Hammer will manage the first two stages of the JV and Newmont will refund $75,000 to Hammer for project consolidation costs.
The Denver-based mining giant is targeting an Ernest Henry style copper-gold deposit.
Hammer CEO Alex Hewlett said the company had been working on the deal for quite some time.
“Newmont’s contribution gives our exploration budget a major boost,” he said.
“It allows Hammer to accelerate exploration on three of its highly prospective IOCG targets, at Overlander, Even Steven and Dronfield, whilst independently advancing exploration on the other IOCG systems it had generated over the last two years.
“The joint venture area is part of a largely overlooked IOCG province on the doorstep of Mount Isa that hosts a number of large previously unrecognised alteration systems with key untested structural and mineralogical indicators of IOCG deposits.”
Hammer will retain 100% of the Kalman, Overlander North and South, and Mount Philip deposits.
However, Newmont has an option to purchase Overlander North and South on completion of stage two of the farm-in at commercial rates, and has a pre-emptive right over the deposits if Hammer chooses to sell.
Overlander has a resource of 1.8 million tonnes at 1.2% copper and 445 parts per million cobalt for 21,116 tonnes of copper and 788t cobalt.
Hammer was recently named Queensland Explorer of the Year.
Newmont will begin field work on the prospects immediately, ahead of drilling in the first quarter of next year.
Shares in Hammer rose 11% to A5c.
