North American Palladium (NAP) and URSA Major Minerals have announced a joint venture agreement for a project in Ontario, Canada.

The two companies signed a letter of intent this week to develop and explore the Shakespeare nickel-copper-platinum metal deposit and the adjacent Agnew nickel, copper exploration property in the Sudbury area.

NAP and URSA hope that by combining their resources they will be able to fast-track the development of the Shakespeare deposit and increase the probability of further discoveries.

Under the agreement, NAP can acquire a 60 per cent undivided interest in URSA's interest in the Shakespeare Property and become the operator by making payments aggregating $1.5 million to URSA and securing the project financing for commercial production.

The $1.5 million will be used for expenditures incurred in connection with the Shakespeare full feasibility programme, which is currently in progress, the companies said in a joint statement.

Once the feasibility study has been completed, NAP will be able to form a joint venture and once financing has been arrange for commercial production, the company will be entitled to an undivided 60 per cent interest in URSA's interest.

Until now, exploration at Shakespeare has been proceeding on the basis of a joint venture between URSA and Falconbridge, with URSA as the project operator.