Bullion major Barrick Gold has entered into a property option agreement with Kenorland Minerals to acquire up to an 80% interest in the South Uchi project, in the Red Lake district of Ontario, Canada.
Barrick could earn an initial 70% interest by spending C$6-million on exploration over six years and deliver a technical report that establishes a mineral resource of at least one-million ounces of gold.
Thereafter, Barrick and Kenorland would form a joint venture and the major would have an option to earn an additional 10% interest in the project.
The South Uchi project covers a portion of the Confederation Assemblage volcanic rocks. Most of the gold deposits in the Red Lake district, including Red Lake, Madsen and Hasaga, are located on the northern margin of the Confederation Assemblage. However, Kenorland says that recent discoveries, such as the LP Fault Zone on the Dixie project by Great Bear Resources, highlight the prospectivity of the entire Confederation Assemblage.
In addition to gold prospectivity, the project could potentially also host lithium, the junior states.
Shares in TSX-V-listed Kenorland gained 5.7% on Monday, trading at C$0.74 apiece.