Barrick Gold (TSX: ABX, NYSE: GOLD) has acquired an option to earn a 70% interest in Golden Minerals’ (NYSE: AUMN, TSX: AUMN) El Quevar silver project in the Salta Province of Argentina.
Barrick will purchase 1 million Golden Minerals shares pursuant to a private placement transaction at $0.21 a share.
As part of the agreement, Barrick has to spend $10 million on exploration, 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, and deliver a written notice of exercise to Golden within eight years.
“Barrick’s interest in exploring the El Quevar district underscores the excellent potential of the high sulphidation epithermal systems at El Quevar to host additional important discoveries,” Golden Minerals president and CEO Warren Rehn said in a statement.
Golden will form a new entity (NewCo) that will hold the El Quevar properties. Upon earn-in by Barrick, the NewCo will be 70% owned by Barrick and 30% owned by Golden
Golden will form a new entity (NewCo) that will hold the El Quevar properties. Upon earn-in by Barrick, the NewCo will be 70% owned by Barrick and 30% owned by Golden.
In 2018, Golden released a preliminary economic assessment that outlined potential for a six-year mining operation producing 29 million oz. of payable silver at an average LOM grade of 409 g/t. The PEA shows a $45 million net present value at a 5% discount rate at a price of $16.66/Ag oz.
In late March 2019, Golden began a 3,000-meter drill program to further define the potential for additional mineralized material in the Yaxtché deposit and surrounding area.
That program identified a new area of high-grade silver.
Golden also announced on Monday that has suspended mining activities at its Velardeña silver-gold properties in Mexico, in compliance with the Mexican government’s directive to suspend all non-essential activities until April 30 in response to the covid-19 pandemic.
Golden’s stock traded up 4.8% midday Monday on the NYSE. The company’s market value is $28.8 million.