Doray farms in to Alloy's Horse Well project

Doray Minerals has entered a $4 million farm-in agreement with Alloy Resources to explore its Horse Well Gold project in the north-eastern goldfields.

Under the joint venture, Doray will gain up to an 80 per cent stake in the project within a six-year period, with a non-withdrawal expenditure of $1 million for the first 12 months.

"We believe, given the geology, structural setting and results achieved to date, that there is the potential for discovery of a significant gold deposit within the project area and we look forward to working with Alloy Resources to advance the project," Doray managing director Allan Kelly said.

He said the Horse Well project represented a very attractive exploration opportunity, given the many similarities with the highly endowed Yandal Belt nearby to the south.

Alloy controls approximately 850 square kilometres of exploration tenements in the northern part of the Millrose Greenstone Belt within the project.

Alloy's other major prospect, Crack of Dawn, is 15km away, with drilling to start in the second half of this year under the terms of the JV.

Doray shares closed 1.5 cents higher at 80 cents.