South African gold major AngloGold Ashanti has signed a farm-in and joint-venture agreement with Vancouver-based Commander Resources, on the Canadian firm’s Baffin Island gold project, in Nunavut territory.

Under the agreement, AngloGold can earn a 51% participating interest in the project by funding exploration and by completing a C$1,2-million private placement in the shares of Commander.

“The agreement enables us to rapidly accelerate exploration and development of our Baffin Gold project, which covers a regionally extensive and exciting new gold district in the rapidly developing Nunavut frontier,” Commander CEO Ken Leigh said in a statement.

AngloGold can earn the controlling stake in the project by spending C$20-million over a six- year period, including a firm commitment to fund C$5,5-million in exploration spending within the first two years.

The commitment includes completion of a minimum of 3 000 m of diamond drilling;

Commander will act as project manager for the first two years of the agreement and AngloGold will pay a 10% management fee on all project expenditures incurred on the project during that period;

Once AngloGold has earned a 51% interest in the property, a 51:49 joint venture will be formed.

AngloGold can then choose to increase its stake to 70%, by sole-funding all on-going expenditures to complete a feasibility study within four years on at least one of the prospects on the property.

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