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 $1 million (Cdn$ 1.39m) 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.
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 neighbourhood,” 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.
Bristow, who took the helm in January 2019, said the work done over the past months had equipped Barrick to become the most valued gold company by 2030.