Redhill Resources (CVE:RHR) and Mutiny Gold (ASX:MYG) said Thursday they have agreed to amend their farm-in agreement from last year for the Gullewa gold property in Australia.
The original agreement, signed in July 2010, required operator Mutiny to complete a positive pre-feasibility study for the property, but now, Mutiny can earn the remaining 30 percent of the project by paying A$4 million to Redhill, without the need to complete the report. Redhill will still retain a 10 percent net profit interest in Gullewa.
In mid-October, Redhill said that it received a total consideration of A$9.0 million from Mutiny under the first part of the option deal, granting Mutiny a 70 percent stake in the property.
Redhill also said Thursday that Mutiny has advised the company that an A$11 million loan and gold hedging credit facility with Credit Suisse has been secured, providing the funding for Mutiny to acquire the remaining 30 percent of Gullewa.
Drawdown of the funds is subject to a number of conditions, which are expected to be completed in the near future, Redhill said. The remainder of the funds from the loan not put towards the acquisition will be used to complete a definitive feasibility study for the project.
The 550 square kilometre Gullewa project rests 450 kilometres north of Perth, in the Yalgoo mineral fields of Western Australia. Gullewa hosts multiple gold deposits of various size and grade, the most significant being the Deflector gold-copper deposit.
Mining infrastructure assets at the Gullewa project includes an 800 tonne per day carbon in leach plant, a licensed tailings disposal facility, a 50-person camp, offices, and workshops.
In addition to the property, Redhill is actively exploring three gold prospects in the historic gold producing Gasgoyne region of Western Australia: the Cobra, McCarthy and Mt. Phillips prospects. It also has two rare-earth projects at the Honey Comb Hills beryllium prospect in Utah and the Morgan rare-earth prospect in British Columbia.