Unigold has officially entered into a binding term sheet with Barrick Gold to establish the conditions through which the latter can earn a stake and establish a joint venture (JV) concerning the Neita Norte Exploration Concession located in the Dominican Republic.
Unigold chairman and CEO Joe Hamilton said: “We welcome Barrick as a partner in the Neita Norte area. Barrick brings considerable technical and financial capability to the project. Barrick operates the world-class Pueblo Viejo mine in the Dominican Republic and has installed a significant amount of related infrastructure in the country, holding a commendable record as a good corporate citizen.
“The Agreement creates an opportunity for both companies to benefit from the development of this frontier area. Unigold will continue to be active in the area as we concentrate on the development of the Neita Sur concession and work to convert our significant resources into producing mines.”
Under the terms of the agreement, Unigold will provide Barrick with an exclusive option to acquire a 60% undivided interest in the Neita Norte Exploration Concession. This option can be exercised by Barrick upon fulfilling the following conditions:
- Incurring a minimum of $2.5m in expenditures related to the concession within the initial three years.
- Incurring a cumulative total of at least $8m in expenditures related to the concession within the first six years, along with delivering a Preliminary Economic Assessment (PEA).
- Incurring a cumulative total of at least $12m in expenditures related to the concession within the first eight years, in addition to delivering a Pre-Feasibility Study (PFS).
- Notifying Unigold in writing of Barrick’s intention to exercise the earn-in right.
Once Barrick has earned a 60% interest in the Neita Norte Exploration Concession, they will have the option to solely fund and deliver a Feasibility Study by the end of Year 12. This will enable Barrick to increase its ownership in the JV to 80%. It is important to note that standard dilution clauses will apply to the JV. If any partner’s ownership falls below 15%, they will be automatically diluted to a 2.5% Net Smelter Return (NSR) royalty. Barrick will act as the manager and operator of the project.
Unigold and Barrick will collaborate to finalise a comprehensive long-form agreement, a shareholder’s agreement, and establish a joint-stock Dominican Company to hold the concession permits. These processes are expected to be completed within the next 60 days. Unigold has already obtained all necessary permissions and permits to conduct exploration activities in the Neita Norte area. Work will commence as soon as practically feasible.
The agreement is subject to the standard representations and warranties from both parties, and its implementation is contingent upon approval from the TSX-V (Toronto Stock Exchange Venture).
