Clancy will have the option to take full ownership of the project, which will involve $A600,000 of cash to ABM as well as 125 million fully paid shares in Clancy and Clancy’s 5.4% shareholder in Genesis Resources, or an agreed cash equivalent.

The explorer’s search for a flagship project has lasted two years.

“The search has taken some time, but the board considers that this transaction brings a particularly attractive combination of immediate targets for resource estimation drilling, well-defined targets ready for initial drill testing and an extensive portfolio of greenfield opportunities,” the company said today.

Limited drilling to date has demonstrated the potential of systems at North Arunta with near surface intercepts of 57m at 3.83 grams per tonne gold at the Kroda prospect and 17m at 3.93gpt gold at the Sabre prospect.

“The transaction will deliver an exciting portfolio of advanced prospects and greenfields exploration targets within a land package covering more than 10,000km in the highly prospective North Arunta region of the Northern Territory,” Clancy managing director Gordon Barnes said.

“ABM and previous explorers have defined extensive gold systems at the Barrow Creek and Reynolds Range projects with strike lengths in excess of 10km.”

The deal is expected to be completed ahead of the 2014 field season with an aim to begin drilling in April, 2014.

ABM managing director Darren Holden said the transaction benefited his company by allowing it to focus on its primary assets.

“As ABM moves into becoming a development and mining company we have been looking at a number of divestment and exploration strategies for our regional portfolio,” he said.

“The North Artunta region is an area of great potential, but is a considerable distance from our main area of focus – the Tanami region.

“The agreement with Clancy provides ABM with cash and continued exposure to upside in the North Arunta region whilst reducing our exploration expenditure requirements.

“Upon completion, the equity consideration also provides ABM with exposure to Clancy’s existing assets including a quality portfolio in the copper-gold belts of New South Wales and a significant shareholding in Genesis Resources.”

Shares in ABM were last trading 4% up at 2.6c while Clancy was unchanged at 1.5c.