- Barrick Gold Corporation’s (ABX) subsidiary sign a binding term sheet with Hemlo Explorers Inc. (HMLO) for an earn-in right over 910 claims of the Pic Project
- Both companies will work towards signing a definitive agreement by the end of this month
- Barrick may earn an 80 per cent interest in the project
- Hemlo will focus on the southwestern corner of the Pic Project for this year’s field season
- Barrick Gold Corporation (ABX) is down 1.28 per cent trading at $30.81 per share as of 1:12 p.m. ET
- Hemlo Explorers Inc. (HMLO) is up 21.87 per cent trading at $0.19 per share as of 1:13 p.m. ET
Barrick Gold Corporation’s (ABX) subsidiary has signed a binding term sheet with Hemlo Explorers (HMLO).
The term sheet is for an earn-in right over 910 claims of the Pic Project located west of Barrick’s Hemlo Mine in Ontario.
Both companies will work towards signing a definitive agreement by the end of this month.
Barrick may earn an 80 per cent interest in the project by delivering a pre-feasibility study within six years of the agreement, of which at least $800,000 of guaranteed spending to use during the first year.
In order to maintain the earn-in right to the end of the expenditure period, Barrick must fund work expenditures of $1 million by each anniversary of the definitive agreement.
Barrick will have the option to extend the expenditure period by two additional one-year periods by paying Hemlo $500,000 for each one-year extension.
Upon closing, Barrick will complete a private placement with Hemlo. It will require Barrick to subscribe for a number of Hemlo common shares equal to the lesser of either $300,000 in proceeds or a 5.00 per cent interest on a non-diluted basis.
Subject to a successful earn-in by Barrick, the two companies plan to establish a joint-venture corporation with Hemlo owning 20 per cent and Barrick 80 per cent.
If either party’s interest in the joint venture corporation declines below a 10 per cent threshold, then that party’s interest will convert to a 1.00 per cent net smelter return royalty.
Hemlo will focus its exploration efforts on the southwestern corner of the Pic Project (called Project Idaho) for this year’s field season.
Barrick Gold Corporation (ABX) is down 1.28 per cent trading at $30.81 per share as of 1:12 p.m. ET.
Hemlo Explorers Inc. (HMLO) is up 21.87 per cent trading at $0.19 per share as of 1:13 p.m. ET.