Sumitomo Metal Mining Co., the owner of Japan’s sole gold mine, is in talks with Australian explorer Gold Road Resources Ltd. about forming a joint venture to develop a Western Australian project, people with knowledge of the matter said.
The Japanese miner is among several parties considering a stake in the Perth-based explorer’s A$455 million ($340 million) Gruyere asset, according to the people, who asked not to be identified as the discussions are private. Gold Road is also weighing other funding options, and it could make a decision by the end of the year after publishing a bankable feasibility study for the project, one of the people said.
Domestic and international producers have approached the company about investing in the undeveloped project, Executive Chairman Ian Murray said last month. The mine is expected to produce about 265,000 ounces of gold annually over 12 years, according to a Feb. 8 statement from Gold Road.
Gold Road has about 5,000 square kilometers (1,930 square miles) of tenements in Australia. It already operates an exploration joint venture with Sumitomo Metal in the southern part of the Yamarna Belt, Gold Road’s website shows.
Hideki Motoki, a representative for Sumitomo Metal, declined to comment. Gold Road declined to comment in an e-mailed statement.
Sumitomo Metal is seeking more stakes in gold ventures to help double output by 2021, President Yoshiaki Nakazato said last month after the company agreed to spend $1 billion to increase its holding in Freeport-McMoran Inc.’s Morenci copper mine.