Sinclair Gold (ASX:SGC) executed a binding earn-in agreement with Medaro Mining for the Sala project in Sweden, representing up to AU$3.4 million in potential cash consideration, shares and Medaro-funded exploration expenditure, while retaining exposure through a net smelter return royalty, according to a Monday Australian bourse filing.

The company said the agreement replaces the non-binding letter of intent disclosed on May 14, providing Medaro with the right to earn up to a 100% interest in the Sala project, with key commercial terms materially in line with those previously disclosed.

The binding agreement provides for up to AU$1.3 million in cash consideration, up to 1.2 million Medaro shares currently valued at about AU$300,000, around AU$1.8 million in exploration expenditure funded by Medaro, and a 1% net smelter return royalty if Medaro earns a 90% interest, increasing to 2% if Medaro acquires the remaining 10%, the filing added.

The company's shares rose 13% in recent Monday trade.