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(Sharecast News) - Oracle Power confirmed on Tuesday that Riversgold has exercised its option to acquire an 80% interest in the Northern Zone Project in Western Australia, having met the minimum spend requirement set out in the companies' heads of agreement.
The AIM-traded firm said it would retain a 20% interest, and be carried on costs until the joint venture agreement was formalised, which was expected by 31 December.
Under the agreement signed in May 2023, Riversgold committed to spending at least AUD 0.6m (£0.3m) on exploration to earn its stake in the project, located 25 kilometres east of Kalgoorlie.
Riversgold would continue to manage operations and advance development, with a drill programme scheduled for 2025, a mining lease application already submitted, and a mineral resource estimate planned.
Oracle said it would not bear any costs until the joint venture agreement was finalised.
The timeline for formalising the arrangement had been extended to allow for the tenement's conversion to a mining lease.
"Riversgold has spent the minimum commitment required to exercise the exclusive option to acquire an 80% beneficial interest in the Northern Zone and will now carry Oracle up to formalising joint venture agreements by 31 December," said Oracle chief executive officer Naheed Memon.
"We now look forward to Riversgold continuing to add value to the project with further drilling to upgrade the tenement status to a mining lease."
Memon said that with gold prices per ounce currently above AUD 4,500 (£2,272) per ounce, the project was looking like a potential candidate for contract mining, trucking and toll milling operations.
"The aim is to build a robust mineral resource estimate (MRE) in the upper section of the porphyry to generate an economic starter pit and I look forward to providing further updates from Kalgoorlie in the coming weeks."
At 1212 GMT, shares in Oracle Power were down 4.71% at 0.02p.
Reporting by Josh White for Sharecast.com.
