Barrick is currently operating the Williams and David Bell Gold Mines which are adjacent to the Hemlo East Property
MetalCorp has entered into an earn-in agreement (the “Earn-In Agreement”) with Barrick Gold, a wholly-owned subsidiary of Barrick Gold Corporation, relating to MetalCorp’s Hemlo East gold property (the “Hemlo East Property”) located about 350 kilometers east of Thunder Bay, Ontario. Barrick is currently operating the Williams and David Bell Gold Mines which are adjacent to the Hemlo East Property. Over 21 million ounces of gold have been produced to date from the Hemlo gold deposits. The Earn-In Agreement is subject to acceptance by the TSX Venture Exchange.
“We are pleased to enter into this agreement with Barrick and look forward to our joint venture with them,” commented Donald Sheldon, the Chief Executive Officer of MetalCorp. “Our shareholders recognize the value of the Hemlo East property and we have always believed in the potential it represents for creating value for their investment. We believe that in Barrick we have secured the right joint venture party to move this project forward.”
The Earn-In Agreement provides that Barrick has the right and option to earn an 80% interest in the Hemlo East Property upon satisfaction of the following conditions:
Barrick paying Cdn$3,000,000 (the “Initial Payment”) to MetalCorp on or before the third business day following TSX Venture Exchange acceptance of the Earn-In Agreement (the date of such payment being the “Initial Payment Date”);
Barrick funding expenditures on the Hemlo East Property as follows: (A) at least Cdn$700,000 (the “Guaranteed Amount”) on or before the first anniversary of the Initial Payment Date; and (B) at least Cdn$4,500,000 (including the Guaranteed Amount) on or before the third anniversary of the Initial Payment Date; and
Barrick delivering a National Instrument 43-101 technical report in respect of the Hemlo East Property on or before the third anniversary of the Initial Payment Date.
During the earn-in period, Barrick will be the operator of the Hemlo East Property and will manage and execute all exploration programs and spending on the Hemlo East Property.
Barrick may withdraw from the earn-in at any time, provided it has paid to MetalCorp the Cdn$3,000,000 Initial Payment and fulfilled its obligation to fund the Cdn$700,000 Guaranteed Amount of expenditures on the Hemlo East Property.
After completion of the earn-in, Barrick and MetalCorp will form a joint venture company (“JVCo”), to hold the Hemlo East Property, to be owned 80% by Barrick and 20% by MetalCorp with funding on a pro-rata basis. Dilution of a shareholder’s interest below 10% will result in the conversion of the interest to a 2% Net Smelter Return royalty. The party holding a majority of shares will be the operator of the JVCo.
Source: Company Press Release