Barrick to invest $10 million in Precipitate Gold
Barrick Gold (TSX: ABX) (NYSE: GOLD) has inked an earn-in agreement with Precipitate Gold (TSX-V: PRG) that gives it the right to earn a 70% stake in the junior’s Pueblo Grande project, located right next to the gold giant’s Pueblo Viejo mine in the Dominican Republic.
To earn the set interest, the world’s second-largest gold producer will have to invest a minimum of $10 million in exploration and deliver a pre-feasibility study within six years of the agreement.
As part of the deal, Barrick has also agreed to subscribe for $1 million (C$1.39 million) of Precipitate’s common shares in a private placement, the Vancouver-based junior miner said in a separate statement.
“The injection of additional capital into the company allows Precipitate to continue the advancement of its other 100%-owned Dominican Republic projects,” president and chief executive, Jeffrey Wilson, said in the statement.
“Our exploration focus will immediately turn to near term drill targets emerging within the company’s nearby Ponton gold project and the ongoing advancement of existing targets at the Juan de Herrera project, immediately adjacent to GoldQuest’s Romero project,” Wilson said.
The deal comes only a year after Precipitate grabbed all of Everton’s Dominican Republic exploration concessions, which included its now flagship Pueblo Grande project.
The asset surrounds the Pueblo Viejo mine site on the west, north and east side, covering roughly 9,863 contiguous hectares, about 50 km north of the capital city of Santo Domingo.
Pueblo Viejo, a joint venture between Barrick (60%) and Newmont (40%), began commercial production in 2013.
In the past year, Barrick has been focusing on its tier-one assets and has reported strong performance across the group, particularly at Cortez mine in Nevada and Veladero in Argentina.
It has also boosted production at Kibali, Congo’s biggest gold mine, which last year beat its production guidance of 750,000 ounces of gold by a substantial margin, delivering a new record of 814,027 ounces.
Porgera in Papua New Guinea has tier one potential but faces many challenges in the form of “legacy issues and an unruly neighborhood,” Barrick’s president and chief executive officer, Mark Bristow, said last month.
He noted that the mine had exceeded guidance and the company continued to negotiate a 20-year lease extension with the government.