The Newcrest Mining Ltd (ASX: NCM) share price is dropping lower on Monday despite the release of a positive announcement.
In morning trade, the gold miner's shares are down 1% to $26.86.
What did Newcrest announce?
This morning Newcrest announced that it has entered into a fully-termed joint venture agreement with Greatland Gold for the Havieron Project. This project is located 45km east of Newcrest's existing Telfer operation.
As part of the agreement, the company has provided Greatland Gold with a US$50 million loan to fund certain early works and growth drilling activities at the project.
This means that Newcrest has now met the Stage 3 expenditure requirement of US$45 million and is entitled to earn an additional 20% joint venture interest. This will result in an overall joint venture interest of 60%.
In addition to this, Newcrest has entered into a farm-in and joint venture agreement with respect to Greatland Gold's Black Hills and Paterson Range East exploration licences. This is through a new joint venture agreement with Greatland Gold called the Juri Joint Venture.
These projects are located within the Paterson Province, approximately 50km from the Telfer operation. The new joint venture covers a huge area of approximately 248km.
Newcrest's Managing Director and Chief Executive Officer, Sandeep Biswas, is very excited with these projects.
Mr Biswas commented: "We are excited to extend our relationship with Greatland Gold and expand our presence in the highly prospective Paterson Province. The Havieron Joint Venture and Loan Agreements support the continued progress at Havieron with the potential to deliver commercial production within two to three years from the commencement of the decline."
"The Juri Joint Venture complements our strong pipeline of exploration prospects and the associated tenements are favourably located in close proximity to our established Telfer operation," he concluded.
Why is the Newcrest share price dropping lower?
While this is a positive development for Newcrest, it hasn't been enough to offset another pullback in the gold price at the end of last week.
The spot gold price is currently fetching US$1,789 an ounce, which is down 1% since this time last week.
