Power Metal Resources and Red Rock Resources said their joint venture New Ballarat Gold is to acquire the exploration licence EL5535 covering the historic Berringa mine in Victoria from Balmaine Gold.
EL5535 is a 288-hectare exploration licence with historical production of 293,250 ounces of gold from 1898-1952 at an average grade of 8.3g/t.
Discussions are underway with with the vendor regarding the possibility of processing ore at their nearby Ballarat gold mine should NBGC discover and develop an economic deposit.
Red Rock Chairman Andrew Bell said: "Having recently announced the grant of a licence covering the old Ajax Mine, which by the 1920s had recorded production of 312,789 ounces at 14.8 g/t, the acquisition of Berringa now means that RRAL has two of the largest historic gold producers of Victoria.
"Both mines have potential extensions that constitute substantial high-grade targets, and at Berringa we can see that these have not been followed up to any significant degree by previous operators.
"There is no guarantee of success, but we also have the advantage of an exploration team that has worked underground and on near-mine exploration at the nearby Ballarat mine."
Payment comprises an initial payment of A$20,000 to be followed by a further A$130,000 on the successful renewal of the licence for five years from its expiry date of 16 November 2022.
A further payment to the vendor of A$350,000 is due upon the public release of an initial Mineral Resource Estimate of not less than 100,000 ounces of gold in the Inferred category with a Net Smelter Return (NSR) Royalty of 1.5% to the vendor up to a maximum total value of A$1.5mln
NBGC inherits the responsibility for payment of a 2.5% NSR Royalty up to a A$50mln limit to Altus Strategies.