Novo Resources (ASX:NVO) formalized a joint venture agreement with Manhattan Gold (ASX:MHC) to advance exploration at the Tibooburra gold project in New South Wales, according to a Thursday statement.
A roughly 2,700-meter reverse circulation drilling program is due start at Tibooburra late in the third quarter, per the statement.
Step out drilling at the Clone prospect will target a northern extension to high-grade gold mineralization, while first-pass drill testing at the Pioneer South prospect will target a 600-meter continuous trend of outcropping gold-quartz reefs, the company said.
As part of the agreement, Novo will issue 1.5 million common Shares to Manhattan unit Awati Resources, which will be subject to a four-month hold period.
Novo is required to spend AU$1.5 million to exercise its option to form a 70/30 unincorporated joint venture with Awati relating to precious metals and base metals on six tenements located in the Albert Goldfields. The company already spent AU$1.3 million of that commitment as of June 30.
Awati is free carried until the completion of a bankable feasibility study at Tibooburra. Once completed, Novo will have the option to terminate the agreement or exercise its option to form the joint venture. If the option is exercised, Novo will obtain a 70% interest in the tenements, the company said.