GoldArc Resources (ASX:GA8) achieved a milestone for its Leonora South Gold Project in Western Australia, executing a binding term sheet with Mineral Mining Services.
The formal agreement converts the previous non-binding letter of intent into a robust commercial framework designed to fast-track the Orion and Sapphire deposits towards active production.
Under the terms of the deal, MMS will assume responsibility for 100% of the initial development expenditure, capped at a $20 million threshold.
The capital is recoverable solely through future project proceeds, meaning GoldArc can advance the project without upfront capital outlays or immediate shareholder dilution.
Once MMS successfully recovers its development costs, the agreement stipulates a 50:50 distribution of all project cashflows.
The arrangement provides GoldArc with a direct, non-dilutive share of production revenue from the Kookynie Goldfields region.
To further align interests, GoldArc has issued 7.5 million listed options to MMS, priced at $0.04 with a 2028 expiry.
Momentum is already building with a 6,000-metre infill drilling programme currently underway at Orion and Sapphire.
The campaign is critical for generating JORC-compliant data to refine resource estimations, which currently stand at a combined 48,014 ounces of gold.
At the time of reporting, GoldArc Resources’ share price was $0.070.