TORONTO – Centerra Gold Inc. (TSX: CG) will contribute up to $300 million cash towards a joint venture in northern Ontario with Premier Gold Mines Ltd. (TSX:PG).
Each partner will own 50 per cent of the joint venture, which will advance Premier’s Trans-Canada land and rights holdings including the Hardrock gold project near Geraldton, Ont.
Toronto-based Centerra says it sees the Trans-Canada joint venture as a complement to its growth projects in Mongolia and Turkey.
Most of Centerra’s gold production currently comes from central Asia, particularly the Kumtor mine in the Kyrgyz Republic.
The Hardrock project has an estimated 4.87 million ounces of gold, based on indicated and inferred resource estimates published in July 2014.
Centerra will initially make an $85 million contribution for its 50 per cent interest in the joint venture. It will provide a total of $185 million of capital, of which half will be made on behalf of Premier, to complete an economic feasibility study, and up to a further $30 million based on the results of an updated mineral resource calculation.
Premier won’t be required to make any contributions to the partnership until Centerra has provide the full amount of its development commitment. After that, each company will fund cash requirements on a 50-50 basis.