Newcrest follows Rio Tinto in joint venture with Australian gold junior

MELBOURNE (Reuters) - Gold explorer Antipa Minerals Ltd on Friday said it has formed a joint venture with Newcrest Mining Ltd in Western Australia’s copper-and-gold hot spot, where Rio Tinto Ltd said it made a major find in 2018.

Newcrest has signed a deal to spend as much as A$60 million ($39.58 million) to jointly explore the southern part of Antipa’s lease in the Paterson province, adjacent to Newcrest’s large ore processing plant and aging Telfur gold mine.

The spend could hand Newcrest up to a 75% stake in the venture - dubbed the Wilki Project - if it meets developmental targets over the next eight years. Newcrest has also spent A$3.9 million on a 9.9% stake in the gold miner, Antipa said in a statement.

Lying east of the better-known Pilbara iron ore region, the Paterson province has long been recognized as an area prospective for copper and gold. However, sandy soil and the remote desert location have made exploration both difficult and expensive.

It shot to global prominence 18 months ago with news of a huge copper and gold find by Rio Tinto, which the major named Winu. Rio has yet to detail the scale of the find, but Chief Executive Jean-Sebastien Jacques said this week that first production could come as soon as 2023.

“It’s a fairly unexplored province because the deposits are buried under desert sands full of snakes and camels,” said analyst James Wilson of broker Argonaut in Perth.

“It’s frontier country up there and it’s hard to explore and it costs a lot of money which is usually an arena reserved for big companies. Antipa has the lion’s share of the ground position.”

Renewed interest has also come as miners have increased exploration spending following a commodity price recovery and as technological advances have opened the region’s potential.

Antipa also holds ground next door to Winu in its northern Citadel project, for which Rio agreed last month to raise its stake to 65% for $14 million over five years.

Shares in Antipa surged as much as 36% on Friday before trimming gains to 27% at $A0.014.

Both majors have other joint ventures in the region. Newcrest has an agreement with Greatland Gold PLC for its Havieron gold-copper project, while Rio has deals including with Sipa Resources Ltd and Carawine Resources Ltd.

Fortescue Metals Group Ltd as well as IGO Ltd through explorer Encounter Resources Ltd are also active in the area.

Reporting by Melanie Burton; Editing by Christopher Cushing