VANCOUVER (miningweekly.com) – Gold major Barrick Gold has signed a comprehensive exploration and development agreement with Premier Gold Mines that include toll-milling and exploration earn-in options for both companies at the McCoy-Cove and Rye projects.
Premier announced on Wednesday that, under the terms of the agreement, Barrick will have an option to earn a 60% interest in the exploration portion of its McCoy-Cove property (the joint venture (JV) property) by spending $22.5-million in exploration before June 30, 2022.
Further, Premier will retain 100% ownership over the Cove deposit portion of the McCoy-Cove property, which includes the high-grade Helen, 2201 and CSD/CSD Gap deposits. Premier will also secure a one-time bulk sample processing arrangement for the planned test-mining programme at its 100%-owned portion of the McCoy-Cove property. It will also have an option to acquire a 100% interest in Barrick’s Rye Vein property, subject to a back-in right by Barrick, by spending $3-million in exploration before December 31, 2019. The Rye property adjoins Premier’s Goldbanks property option.
“Consistent with Premier’s strategy to secure accretive partnerships, this arrangement will broaden our already positive working relationship with Barrick in Nevada and provides certainty in processing a one-time bulk sample of underground ore from the upcoming development and test-mining programme of the Cove deposit,” stated Premier president and CEO Ewan Downie.
He added that the agreement with Barrick would expand and accelerate the regional exploration at McCoy-Cove, while Premier retains full ownership of the core deposit. “Our option to earn a 100% interest in the Rye project, provides exposure to one of the highest-potential epithermal vein projects in a world-class mining jurisdiction.”
Barrick will hold an option to earn a 60% interest in the JV property, subject to Barrick making a firm commitment to spend $6-million in exploration before June 30, 2019, with Premier as operator at the direction of a steering committee, following which Barrick will have the option to become the operator.
Barrick will then have to spend a further $16.5-million in exploration on the property by June 30, 2022, with Barrick as operator. Following the 60% earn-in, funding for the JV property will be on a proportionate basis. Barrick will hold a right of first refusal over the ‘Cove deposit’ until the earliest of 5.5 years or one year, following the completion of the earn-in on the JV property.
Premier will retain the right to use the JV property for milling, tailings and other ancillary facilities related to the retained property, subject to the priority of the JV property requirements once Barrick completes its earn-in obligation, but in each case subject to a reasonable site plan that is mutually approved by the JV property and Premier.
Exploration on the JV property is expected to start early in 2018 and will include detailed surface mapping and sampling followed by drilling to test several prospective targets.
Premier advised that the Rye project is located in the East Range, about 50 km south of Winnemucca, in Pershing county. Rye is a gold-bearing, low-sulphidation epithermal vein system with the potential to host “bonanza-grade” gold mineralisation.
Premier has signed agreements to acquire properties from Kurt Schendel and Nevada Sunrise adjoining the Goldbanks and Rye properties. These acquisitions complete the consolidation of the core part of a district that hosts one of the most extensive epithermal vein systems in North America.
In 2016, Premier secured an option to earn a 50% interest in the Goldbanks property from Kinross Gold. It advised that both the Schendel and Nevada Sunrise properties have been offered to Kinross to be incorporated into the Goldbanks JV.