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Diversified mining group Metals X Limited (ASX:MLX) has inked a mining and profit share deal with Southern Gold Limited (ASX:SAU).
The agreement will enable Southern’s Cannon Gold Resource to be mined and processed at its Jubilee Plant in Western Australia.
Metals X says it will provide funding and technical assistance in both open pit and underground mining to mine the resource.
The miner advises revenues from the project will be first allocated to reimbursement of costs incurred and surplus funds will be equally shared.
Managing Director Peter Cook says the innovative deal will see Metals X share the risk and reward from mining the resources.
Mr Cook believes Southern Gold has an opportunity to become a producer without having to tap a very difficult equity and debt market for funding.
Metals X reported a net profit of $9.2 million in the first half of the 2014 financial year.
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