Canada-based mining firm Barrick Gold has entered into an earn-in agreement to acquire a 70% stake in Golden Minerals’ El Quevar silver project in the Salta province of Argentina.
Under the terms of the agreement, Barrick will acquire $1m worth Golden Minerals shares pursuant to a private placement transaction at $0.21 a share.
Barrick will have to spend $10m on exploration to earn 70% interest in El Quevar project
According to Golden Minerals, to earn an undivided 70% stake in the El Quevar project, Barrick will have to spend $10m on exploration over a total of 8 years.
The company will have to deliver an NI 43-101-compliant pre-feasibility study describing a potentially profitable operation with mineral resources of not less than two million gold equivalent ounces.
Golden Minerals president and CEO Warren Rehn said: “Barrick’s interest in exploring the El Quevar district underscores, as we have long maintained, the excellent potential of the high sulfidation epithermal systems at El Quevar to host additional important discoveries.
“Barrick has a long history of success in discovering, developing and mining world-class gold deposits in the Andes and elsewhere. This agreement sets a reasonable base value on our existing asset and allows for substantial upside if Barrick is successful in its exploration efforts at El Quevar.”
Golden Minerals stated that it will form a new company that will hold the El Quevar properties.
Upon earn-in by Barrick, the joint venture will be 70% owned by Barrick and 30% owned by Golden Minerals.
In 2018, Golden Minerals had released a preliminary economic assessment that outlined the potential for a six-year mining operation.
In June last year, Golden Minerals had entered into an agreement to sell certain of its Mexican properties to Compañía Minera Autlán for $22m.
