PERTH (miningweekly.com) – ASX-listed junior Alicanto Minerals has entered into an earn-in agreement with major Barrick Gold over the Arakaka gold project, in Guyana.
Under the terms of the agreement, Barrick could earn a 65% interest in the project by spending $10-million within the next four years.
The gold major would be required to spend $8-million on exploration at Arakaka over the next four years, and at the end of the earn-in period would pay Alicanto an additional $2-million.
Once Barrick has earned a 65% interest in the project area, the two companies would form a joint venture (JV), and would contribute to further exploration and feasibility costs on a pro-rata basis. Should Alicanto decide not to contribute to the JV prior to a decision to mine, the junior’s shareholding in the project would dilute to no less than 15%.
Once a decision to mine had been taken, Alicanto could either choose to contribute or convert its remaining interest in the Arakaka project into a 2% net smelter royalty.
“The board of Alicanto is extremely pleased to work with Barrick as a funding partner on the Arakaka project. Considering Barrick’s strict investment criteria in both quality of people and size of potential projects, I am pleased Barrick has recognised not only the gold endowment potential of the Arakaka project, but also the technical capability of our team, and the contribution we can make,” said Alicanto MD Travis Schwertfeger.
The Arakaka project had seen over $20-million in exploration investment prior to Alicanto obtaining the project, which identified extensive gold anomalies and a number of top tier drill targets.
The project had been the source of more than one-million ounces of alluvial and near-surface gold production, with a mining history that exceeded 100 years.