Nexus Minerals (ASX:NXM) should trade firmer after entering into...

Nexus Minerals (ASX:NXM) should trade firmer after entering into a farm-in and joint venture agreement over the Triumph Gold Project in the Eastern Goldfields of Western Australia.

It covers an area of historic gold mine workings within a mineralised structure of some 16 kilometres.

Nexus last traded at $0.058 and is cash backed at over $0.10.

The area was principally mined between 1897 and 1921, with recorded production of 8,100 tonnes at 24.5g/t gold from one section of the workings and 22,168 tonnes 46.4g/t gold from another.

There has been very limited exploration undertaken on the tenements since the turn of the century, and only in the search for shallow oxide gold potential during the late 1980’s to early 1990’s.

The limited amount of drilling that has taken place has yielded significant gold results despite only 5 holes drilled deeper than 80 metres with the deepest being 160 metres.

The key terms of the agreement with vendor, Coxrocks Pty Ltd are:

- Nexus is the sole manager of the Farm-In and Joint Venture from the commencement date;
- Year 1 - $50,000 cash deposit to be paid to the vendor 14 days from the date of the JV agreement being signed by both parties, with 75% of deposit funds to be spent in the ground by the vendor;
- Year 1 – Nexus to spend $200,000 on the project to earn 40% interest;
- Year 2 – Nexus to spend $250,000 on the project to earn a further 20% interest;
- Year 3/4 - Nexus to spend $250,000 on the project over a 2 year period to earn a further 20% interest;
- Year 5 –The Vendor can elect to contribute to the JV expenditure in proportion to its interest. If the vendor elects not to contribute to JV expenditure, then Nexus can sole fund $150,000 of expenditure to earn a further 15% interest.

Nexus will retain an option to acquire the remaining 5% in consideration of granting the vendor a 1% net smelter royalty capped at $2,000,000.

Nexus also has the right to elect to exit the JV after a minimum spend of $100,000 (excluding deposit).

Nexus will be undertaking a drill program in the coming months across a number of the prospects within the project area, to test for the depth extensions of the mineralised structures identified to date.