Bullfrog Gold Corp. [BFG-CSE; BFGC-OTCQB; 11B-FSE] shares rallied sharply Wednesday September 9 after the company acquired 1,500 acres adjoining its Bullfrog Gold Deposit in Nevada from Barrick Gold Corp. [ABX-TSX; GOLD-NYSE]. The properties are located about 200 km northwest of Las Vegas.
The company also arranged a $22 million financing to be completed by Augusta Investments Inc., a mining sector-focused management group based in Canada and the U.S. led by Richard Warke.
Bullfrog is appointing Maryse Belanger as President and CEO, former President, COO and a director of Atlantic Gold. She replaces David Beling.
Bullfrog Gold shares rallied on the news, jumping 50% or $0.09 to 27 cents on volume of 1.06 million. The shares are currently trading in a 52-week range of 27 cents and $0.08.
Bullfrog Gold is a Delaware corporation that controls a commanding land and resource position in the Bullfrog Mine area where Barrick produced 2.3 million ounces of gold between 1989 and 1999 when ore reserves were depleted.
Measured and indicated resources in the Bullfrog pits and MS areas stand at 525,000 ounces of gold, averaging 1.02 g/t, according to a 2017 estimate by Tetra Tech. Most of these resources are in the north extension of the Bullfrog pit.
There are inferred resources of 110,000 ounces of gold averaging 1.2 g/t, material that is located in the Mystery Hill area adjacent to the Bullfrog pit.
It is believed that those deposits extend under the additional Barrick lands that are being acquired.
Under the agreement, Bullfrog is acquiring all of Barrick’s mining claims, historical resources, permits and water rights in the Bullfrog mine area, a move that will add approximately 1,500 acres to Bullfrog’s current land position of 5,250 acres. This will allow for the backfilling of nearly all mine waste in the south part of the Bullfrog pit upon regulatory approval, thereby substantially reducing environmental impacts and mining costs.
In return, Bullfrog will issue an expected 54.6 million units to Barrick at $0.20 per unit. Each unit consists of one share of Bullfrog and one warrant exercisable for four years for one additional share at $0.30. As a result, Barrick will own 15.9% of the company on an undiluted basis, or 19.9% on a fully-diluted basis.
Also, Augusta will buy 110 million units at $0.20 per unit for proceeds of $22 million. Each unit has the same term as the units being issued to Barrick. As a result, Augusta will own 31.9% of Bullfrog on an undiluted or 40.2% on a fully-diluted basis.
Bullfrog will grant a 2% NSR royalty on all minerals produced from the Barrick lands to Barrick, subject to a maximum aggregate NSR royalty of 5.5% on any individual mining claim and a minimum of 0.5% NSR royalty granted to Barrick on any individual mining claims.