After flagging it was in the "final stages" of negotiations with its 50% partner Caucasian Mining Group at the end of last year, Georgian said it and CMG have now agreed to fund the development on a 50:50 basis, with the gold oxides close to surface being the initial production focus.
Georgian Mining shareholders have been awaiting news about how the joint venture will progress for a long time and, judging by the 7% share price drop, the announcement did not live up to expectations.
The company has sole funded the joint venture to date, meeting its US$6 million commitment to earn its 50% interest.
Back in April 2017, the company published an updated copper resource at Kvemo Bolnisi of more than 1 million tonnes. This triggered negotiations with CMG over delivering such a tonnage to the nearby Madneuli mine, in Georgia, owned by CMG's production arm, RMG.
It also led to CEO Greg Kuenzel saying he expected the project to be producing a saleable product by the end of 2017.
Close to a year of negotiations later, the two companies have come back with an initial plan to build a mining operation at the Kvemo Bolnisi East Gold Zone 2 and process the ore at either Madneuli or Sakdrisi, also another nearby operation owned by RMG.
This is an obvious near-term option - GZ2's inferred and indicated resources total 2.29 million tonnes grading 0.85g/t Au from close to surface that look to be amenable to heap leaching.
Its position above the Copper Zone 1, which hosts inferred resources of 2.22Mt at 0.8% Cu and 0.1g/t Au, means it could effectively subsidise the deeper - but still relatively shallow - copper sulphide operation below.
The plan for development will see infill drilling kick off next month. This is expected to take two months to complete with the results incorporated into a final JORC-compliant resource estimate for the gold oxides at GZ2.
In tandem, additional bulk sampling, metallurgical testwork, site investigations and environment studies will be carried out.
The company also plans to carry out another drill programme over the 860 square kilometre licence this year.
This will look to further expand the copper-gold sulphide resources already defined at the project, in addition to testing targets over the wider licence area.
The final memorandum of understanding between Georgian and CMG is conditional upon completion of the 2018 work programme, a positive feasibility study and obtaining additional permits relating to GKZ extraction.
Georgian shares fell 7% to £0.09 (US$0.13) by mid-morning in London following the announcement.
