TORONTO (miningweekly.com) - Vancouver-based Midway Gold Corp has signed a definitive agreement with a subsidiary of Barrick Gold for an exploration agreement and an option to form a joint venture with Midway's Spring Valley project, in Pershing County, Nevada.

Barrick has been granted an exclusive right to earn a 60% interest in the project by spending $30-million on the property - and at least $4-million in year one - over five years.

The Toronto-based gold giant can also increase its interest by a further 10% by spending another $8-million in the following year.

Finally, Midway can also opt to allow Barrick to earn another 5% by carrying it to a production decision and arranging financing for Midway's share of mine construction expenses.

The carrying and financing costs plus interest would then be recouped by Barrick once production begins.

"This agreement represents a milestone in the development of Spring Valley and fulfills our goal to advance the project towards a production decision," said Midway president and CEO Alan Branham.

"We believe that Barrick has the capability to develop Spring Valley into a producing mine."

Barrick is currently one of Midway's largest shareholders, with 8,48% of the junior.

Spring Valley is a porphyry/diatreme hosted gold system beneath pediment gravels.

An updated Canadian NI 43-101-compliant inferred resource of 87,75-million tons, grading 0,021 oz/t gold, for a total of 1,84-million ounces using a cutoff grade of 0,006 oz/t of gold was reported on March 3, 2009.

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