Greatland Gold PLC (AIM:GGP, OTC:GRLGF) has been notified by partner Newcrest that it wants to exercise its option over a further 5% of the Havieron gold prospect in Western Australia.
Newcrest has issued a notice to Greatland stating it would like to start the process to decide an exercise price by mid-February 2022.
Under the joint venture agreement, if the option exercise price cannot be agreed by this date, each party is thereafter required to notify the other of its assessment of fair market value for Havieron
If both parties’ assessments are within 10% of each other, the option exercise price will be the average of those assessments.
A wider differential will see the judgement pass to an independent expert for determination
Following agreement or determination of the fair market value option exercise price, Newcrest has 30 business days to exercise its option to acquire the additional 5% interest.
Proceeds from the exercise are first paid against the existing Newcrest loan facility, said Greatland.
Following the delivery of a Pre-Feasibility Study earlier this year, Newcrest's stake in the Havieron joint vent venture can rise to 70% (30% Greatland).
If the additional option is exercised, Newcrest’s interest will rise to 75% (Greatland 25%).
Shares in Greatland jumped 16.5% to 14.8p.