Valkea Resources has entered into an agreement with S2 Resources, allowing S2 to acquire up to an 80% interest in Valkea's Yuengroon, Ballarat West and Silver Spoon tenements in the Victorian Goldfields, Australia.

This agreement requires S2 to sole-fund A$1.2m in expenditures over four years to earn the interest.

If the option is exercised, S2 will acquire an 80% stake in the projects, with Valkea retaining the remaining interest.

Should any party's joint venture interest fall below 10%, it will convert to a 2% net smelter return royalty.

The agreement awaits approval from the TSX Venture Exchange (TSX-V) and Ministerial consent under the Mineral Resources (Sustainable Development) Act 1990.

The agreement follows a letter of intent between the two companies dated 28 February 2024, with terms consistent with the initial understanding.

Disinterested shareholders approved the option at a special meeting on 3 September 2024, meeting TSX-V and MI 61-101 requirements due to S2 being a related party.

Valkea Resources CEO Chris Donaldson said: “We are pleased to announce the finalisation of the agreement on our legacy Australian assets with S2, enabling them to earn into three of our highly prospective Victorian properties.

“The projects are located in the world-class Victorian Goldfields and in close proximity to Agnico Eagle’s Fosterville mine; these assets hold significant exploration potential. S2 is the ideal operator for these properties, with a highly accomplished local team with demonstrative success in the district.

“At the same time, Valkea remains firmly focused on advancing its flagship properties in Finland, where we are currently drilling. This transaction enables us to retain exposure to the exploration upside of our non-core assets while concentrating on our flagship project,” he added.

Valkea is exempt from formal valuation requirements under MI 61-101 as its shares are not listed on a specified market. The exemption applies under section 5.5(b) of MI 61-101.