i-80 Gold and Nevada Gold Mines (NGM), a joint venture (JV) between the world’s biggest gold producers Barrick Gold and Newmont, on Tuesday announced an asset exchange agreement, which executives say is a “win-win” for both companies.

NGM would acquire from i-80 the remaining 40% interest in the South Arturo JV and a low-cost option to acquire the adjacent Rodeo Creek exploration property.

In exchange, NGM would offer i-80 the Lone Tree and Buffalo Mountain properties, as well as infrastructure which is currently in care and maintenance.

“Through the acquisition of Lone Tree, an asset not being utilised by NGM has become a transformational asset for i-80. In return, NGM’s acquisition of i-80’s 40% of the South Arturo Joint Venture secures additional ounces with both openpit and underground optionality for our Carlin operation,” said NGM executive MD Greg Walker.

i-80 separately also announced an acquisition agreement to acquire the Ruby Hill mine from affiliates of Waterton Global Resource Management. Ruby Hill hosts multiple deposits that collectively have the potential to represent one of the biggest gold and silver endowments in the state of Nevada.

These acquisitions, i-80 CEO Ewan Downie said, would position i-80 to become one of the biggest gold producers in the state of Nevada with the capacity to process refractory and oxide mineralisation.

Currently on care and maintenance, the Lone Tree property hosts existing infrastructure that includes a whole ore autoclave with capacity of one-million tonnes a year, a flotation circuit with capacity of 1.8-million tonnes a year, a CIC circuit and leach pad with 6.5-million tonnes of remaining capacity, a tailings dam with 1.5-million tonnes of remaining constructed capacity and an additional 10-million tonnes of permitted capacity, a waste dump, along with several buildings useful for the development of i-80’s projects.

“We believe that this will allow i-80 to overcome a crucial barrier to entry that most of our peers face,” Downie said.

The Lone Tree complex, once refurbished, would also process refractory mineralisation from the newly acquired Ruby Hill.

In the interim, NGM has agreed to provide processing capacity for i-80 mineral resources from the McCoy Cove, Granite Creek and Ruby Hill mines at its autoclave facilities.

PRIVATE PLACEMENT
i-80 also announced a private placement, whereby NGM would acquire up to 9.9% interest in new i-80 common shares for up to $50-million and a nonbinding term sheet with Orion Mine Finance for up to $240-million in acquisition and development financing.

Equinox Gold, which is i-80’s biggest shareholder, has indicated that it would participate in the equity private placement through the exercise of a portion of its anti-dilute rights.

The exchange agreement provides for payment to NGM of contingent consideration of up to $50-million based on mineral resources from the Lone Tree property.

NGM has also agreed to reimburse i-80 Gold an amount of $7.3-million for certain funding previously advanced by i-80 Gold in respect of South Arturo.