Kuniko (ASX:KNI) said it is set to farm into Impact Minerals' (ASXP:IPT) Commonwealth gold-silver-copper project in New South Wales under a binding joint venture agreement, according to a Thursday Australian bourse filing.

Under the agreement, Kuniko will issue 3,125,000 shares to Impact, following a due diligence period of two weeks. It will also spend AU$1.5 million within two years to earn a 51% interest in the project, and a further AU$1.5 million within another two years to earn a 70% stake.

Kuniko will free-carry Impact's 30% stake up to a decision to mine. At that point, Impact will decide to either contribute or dilute its stake to 10% which will then convert to a 2% net smelter royalty.

Kuniko will conduct a one-for-three non-renounceable rights issue at AU$0.07 per share with one-for-three free attaching options, closing Sept. 12.