Centerra is a Canadian-based gold mining company focused on operating, developing, exploring and acquiring gold properties in North America, Asia and other markets worldwide and is one of the largest Western-based gold producers in Central Asia.
Viscount said the agreement covers the company's Cherry Creek property located in White Pine County, Nevada. Initially, Viscount will be the project manager.
READ: Viscount Mining completes first of three-phase drill program at Silver Cliff property, Colorado
The Cherry Creek project is located in northeastern Nevada some 50 miles north of Ely, consisting of 320 unpatented and patented claims covering more than 2,658 hectares. The property contains more than 20 past-producing mines where high-grade gold and silver production came from up to the 1920s.
"We are very pleased to have entered into an agreement with a company of Centerra's stature and experience, and look forward to a long and mutually beneficial relationship," said Viscount CEO Jim MacKenzie in a statement.
Mark Abrams, director and vice president of exploration at Viscount, added: "Cherry Creek is one of the few remaining under-explored mining districts with geological attributes to the formation of both those in production at nearby Kinross's Bald Mountain Mine, and Newmont's Long Canyon Mine. We are excited to have Centerra bring their exploration and financial strength and join us in exploring the Cherry Creek project."
Under the terms of the agreement, Centerra has the right to acquire a 70% interest in the property through making annual payments totaling US$250,000 and spending US$8 million on mineral exploration costs on the property over four years.
If Centerra's option vests, then Viscount and Centerra will enter into a joint venture agreement: Centerra would hold an initial interest of 70% in the JV, including the property and any properties in the area of interest, and Viscount would hold an initial interest of 30%, including the property and any properties in the area of interest.
To maintain their respective percentage interest, each party would then, upon provision of a reasonable amount of notice, contribute on a pro-rata basis to further exploration and any potential development or mining on the property and/or the properties within the area of interest.
The parties also would establish a management committee for which the representation of each party will, at a minimum, be in proportion to its percentage interest in the JV. This management committee will propose and determine the exploration and potential development of mining on the property and/or the properties within the area of interest.
Shares in Viscount Mining gained 8.4% in Toronto to stand at C$0.45 each.
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