Barrick's Hemlo mine, in Ontario
Canadian major Barrick Gold has entered into two option and joint venture (JV) agreements with junior miners near its Hemlo operation, in Ontario.
The first is with TSX-V-listed Melkior Resources, which has granted Barrick the right to earn-on up to a 75% interest in the White Lake project, 20 km from the Hemlo mine.
Under the terms of the option agreement, Barrick could earn a 75% interest in the White Lake property in consideration for completing $4-million in exploration expenditures over a period of five years.
Barrick has a minimum commitment of $500 000 during the first two years of the option period, during which the bullion major will also act as the operator of the property.
Upon Barrick completing the expenditures and earning its 75% interest, the parties will enter into a JV agreement to carry on operations with respect to the property, and the funds required for further development will be contributed by the JV parties based on their proportional JV interests.
Dilution of a shareholder's interest below 10% will result in the conversion of the interest to a net smelter return royalty of either 1% or 2% on certain claims dependent upon pre-existing royalties.
Melkior CEO Jonathon Deluce commented that “there is still a lot to come from this mining camp”, which has produced more than 21-million ounces of gold, with “Barrick’s plans to extend the life of the Hemlo gold mine by transitioning it to a modernised tier-two asset”.
Barrick has also entered into an earn-in agreement with TSX-V-listed Metal Corp, relating to the company’s Hemlo East gold property, which is adjacent to Barrick’s Williams and David Bell gold mines.
The earn-in agreement provides that Barrick has the right and option to earn an 80% interest in the Hemlo East property upon satisfaction of several conditions.
Some of these conditions include Barrick making an initial payment of C$3-million to MetalCorp on, or before, the third business day following the TSX-V’s acceptance of the earn-in agreement; and Barrick funding expenditures on the Hemlo east property of at least C$700 000 on, or before the first anniversary of the initial payment date, as well as a payment of at least C$4.5-million on or before the third anniversary of the initial payment date.
During the earn-in period, Barrick will be the operator of the Hemlo East property and will manage and execute all exploration programmes and spending on the property.
Barrick may withdraw from the earn-in at any time, provided it has paid to MetalCorp the C$3-million initial payment, and fulfilled its obligation to fund the C$700 000 guaranteed amount of expenditures on the Hemlo East property.
After completion of the earn-in, Barrick and MetalCorp will form a JV company to hold the Hemlo East property, to be owned 80% by Barrick and 20% by MetalCorp with funding on a pro-rata basis.