Aphrodite Gold (ASX: AQQ) has signed a farm-in and joint venture heads of agreement with Breakaway Resources (ASX: BRW) for the gold rights over Breakaway’s Scotia Project in Western Australia. Significantly, Scotia is located only five kilometres to the west of Aphrodite Gold’s over one million ounce (Moz) Aphrodite Deposit and 30 kilometres to the south of the +5Moz Paddington Deposits. Aphrodite will be able earn up to an 80% interest in the gold rights by spending $1.5 million over a period of up to 4 years with Breakaway free carried until the decision to mine. The agreement will result in a major evaluation of Scotia’s gold potential at a time of strong exploration and investor interest in the gold sector. Aphrodite is now planning to kick off an aggressive 3,000 to 5,000 metre Reverse Circulation (RC) drilling program testing the prospect shortly. The potential at the project is underlined by the historic drill intercepts at the Chameleon prospect, which lies within the Scotia Project’s boundaries. Historic intercepts of up to 22 metres at 5.43 grams per tonne (g/t) gold and 29 metres at 3.40g/t gold have been received at Chameleon. Importantly, mineralisation remains open both at depth and along strike. The drilling at chameleon, which borders Aphrodite's projects, aims to extend the geological continuity. The Scotia Project is located about 70 kilometres northwest of Kalgoorlie in the North Eastern Goldfields, and is highly prospective for gold as it lies within the Bardoc Shear Zone which is a large regional structure which hosts numerous gold deposits including the Aphrodite Deposit. At Chameleon, gold mineralisation occurs within a steeply dipping, north plunging shoot that has been previously drilled on nominal 50 metre centres, over 300 metres strike and to a depth of 200 metres. Under the terms of the farm-in and joint venture heads of agreement: · Breakaway retains the rights to all other minerals including nickel. · Aphrodite can earn an initial 51% interest in the Scotia Project’s Gold Rights by spending $400,000 within the first twelve months with a minimum of $300,000 to be spent by 31st July 2011. · Aphrodite can earn an additional 29% interest in the Scotia Project’s Gold Rights (for a total 80% joint venture interest) by spending a further $1.1 million on exploration, or when the joint venture parties make a decision to mine, whichever occurs earlier. · Upon electing to earn an additional 29% interest, Aphrodite must, as a minimum, spend each year, the Scotia Project’s aggregate expenditure commitment of approximately $360,000. · Breakaway will be free-carried at all times until a decision to mine. · On a decision to mine Breakaway may elect to contribute to a mining joint venture operation or elect to transfer its interest to Aphrodite in exchange for a 1.5% Net Smelter Royalty. The latest drilling results announced yesterday in the Alpha Lode at the Aphrodite Gold project, have boosted the gold mineralisation and are likely to add to the one million ounce resource base. With a Scoping Study planned for 2011, the company's current valuation neither reflects the defined resource base nor the potential resource upside from today's farm-in announcement.

Source