Newcrest Mining Ltd (ASX:NCM) has signed a Heads of Agreement to obtain at least a 7.1 per cent stake in British firm Sumatra Copper and Gold Plc.

The Australian gold producer said it had paid $2.5 million, comprising 10 million shares at 25 cents each and 10 million attaching options in return.

Newcrest's interest in Sumatra, which explores for gold-silver and copper-gold mineral deposits on the Indonesian island of Sumatra, could reach 13.2 per cent if fully exercised.

The non-binding agreement will also allow Newcrest to earn a 70 per cent interest in Sumatra's Tandai gold exploration project by shelling out $US12 million over five years.

Additionally, Newcrest can obtain a 25 per cent interest in Sumatra's Tembang gold project for $US10 million, exercisable before March 31, 2011, by giving a downpayment of $US500,000.

Sumatra chairman Warwick Morris said his company was pleased with the new agreement.

"We regard this as a clear endorsement of the quality and potential of our tenement package and our people," Mr Morris said.

Newcrest chief executive Ian Smith said the deal was in accord with his company's strategy of seeking early stage entry into high-quality gold projects.

At 1046 AEST, Newcrest shares edged down 48 cents at $32.87.