The US mining firm will acquire Barrick Gold’s mining claims, permits, historical resources, rights of way, and water rights in the area
Bullfrog Gold said that it has signed deals with certain subsidiaries of Barrick Gold and Augusta Investments to acquire rights to 1500 acres adjoining its Bullfrog Gold Deposit in Nevada, US.
In September 2020, the US-based gold and silver exploration company had entered into a binding term sheet with the two parties regarding the acquisition.
As per the deal, Bullfrog Gold will purchase Barrick Gold’s mining claims, permits, historical resources, rights of way, and also water rights in the Bullfrog mine area.
Barrick and Augusta to have significant stake in Bullfrog Gold
Upon closing of the deal, Barrick Gold and Augusta Investments will become significant shareholders in the US miner.
The US firm said that some individuals identified by Augusta Investments will concurrently complete investment of C$22m ($16.7m) investment for 110 million shares in the company.
Barrick Gold, on the other hand, will own nearly 19.9% of Bullfrog Gold’s shares on a fully diluted basis. Furthermore, the US firm will also grant the Canadian mining company a 2% smelter royalty on all minerals produced from the claims.
Bullfrog Gold CEO and President David Beling said: “We are delighted to announce the signing of the Definitive Agreements and are encouraged by the positive market reaction to the announcement of the binding term sheet in respect of the Transaction.
“Bullfrog will be well-funded to expedite the exploration and development of the Bullfrog project, and we are excited to welcome our new cornerstone shareholders, Barrick and Augusta.”
A mineral lease and option to purchase agreement signed in March 2015 between a subsidiary of the US firm and the Canadian miner, as amended, has been terminated, thereby removing the latter’s back-in right.
The closing of the deal is likely to occur in the fourth quarter of 2020. It will be subject to certain government approvals, the approval of the Canadian Securities Exchange, and other customary conditions.
In another development, Barrick Gold revealed plans to extend the life of the Hemlo gold mine in Canada by transitioning it to a modernised tier two asset with a purely underground operation.
Currently, an open pit operation, the Hemlo gold mine will have a mining life of more than 10 years with annual production of over 250,000 ounces of gold following its conversion.