Bullfrog Gold (CSE: BFG) announced Tuesday it has entered into a binding term sheet to acquire rights to 1,500 acres adjoining its Bullfrog gold deposit in Nevada from Barrick Gold (TSE: ABX) with a C$22 million (about $16m) financing to be completed by Augusta Investments Inc.
Barrick will own 15.9% and Augusta will own 31.9% of Bullfrog’s shares outstanding after closing of the transaction, calculated on an undiluted basis.
The company will acquire all of Barrick’s mining claims, historical resources, permits and water rights in the Bullfrog mine area adding approximately 1,500 acres to its current position of 5,250 acres, allowing for the backfilling of nearly all mine waste in the south part of the Bullfrog pit upon receipt of required regulatory approval, reducing environmental impacts and mining costs, it said.
Current resource estimates at the Bullfrog deposit are 16.07 million tonnes in the measured and indicated category and 2.85 million tonnes in the inferred category.
The company also announced the appointment of Maryse Bélanger as president and CEO, along with the appointment of Donald Taylor, Daniel Earle, and a Barrick nominee to the company’s board of directors.
“This is potentially another value-creating transaction which, once completed will consolidate assets to create an exciting new mining project, led by a skilled team and with strong financial backing,” Barrick CEO Mark Bristow said in a media statement.
“It is also in line with Barrick’s strategy of bringing non-core assets to account.”
At market close Tuesday, Bullfrog’s stock was up $9.9%on the OTC. The company has a $23.4 million market capitalization.