Barrick Gold Corp. is upping its investment in Midas Gold Corp.
One year ago, Barrick purchased 46,551,731 common shares of Midas Gold for about $38 million. On Tuesday Barrick announced that it will purchase an additional 7,274,142 common shares of Midas for about $4.4 million Canadian, or $3.3 million U.S. This increases the percentage of Midas shares owned by Barrick from 19.6 percent to 19.9 percent.
The offering of Midas shares is expected to close around June 19.
When Barrick made the initial purchase of Midas shares last year, Kelvin Dushnisky, the president of Barrick at that time, said, “Midas Gold’s Stibnite Gold project in Idaho offers a compelling investment proposition, with low geopolitical risk, potential for production of over 300,000 ounces of gold per year at competitive operating costs, and exploration upside.”
“We are excited to announce a new partnership that will help make the Stibnite Gold Project a reality and get Midas Gold across the permitting and feasibility finish line,” Midas Gold Corp. said in a blog last year.
On Tuesday Barrick said in a press release that the company is making this year’s purchase of Midas stock for investment purposes.
“Depending on market conditions and other factors, including Midas Gold’s business and financial condition, Barrick may, subject to the terms of the investor rights agreement previously entered into by Barrick and Midas Gold, acquire additional common shares or other securities of Midas Gold or dispose of some or all of the common shares or other securities of Midas Gold that it owns at such time,” Barrick said.
Midas said Monday that it was offering 33.2 million common shares, and that Barrick had indicated its intent to acquire enough of these shares to bring its Midas common share ownership to 19.9 percent.
“The proceeds from the sale of the Common Shares will be used to advance the feasibility study on, and permitting for, the redevelopment and restoration of the Stibnite Gold Project, Idaho, and general working capital,” Midas stated.
The Stibnite Gold Project is near McCall, Idaho. The site has the potential to produce 388,000 ounces of gold per year for the first four years from the fourth-highest grade open pit in the U.S., according to Midas Gold.
From construction to final reclamation and closure, the company expects the project to create more than 1,000 jobs, according to a 2017 community presentation.
Before operations can begin, however, the company must progress through years of regulatory review. The process is sensitive because the district, which encompasses part of the East Fork of the South Fork of the Salmon River, experienced heavy environmental disturbance from historical mining.
“The ecosystem at the Stibnite Gold Project site is in need of healing; our plan is as much about restoring the site as it is about mining it,” Midas Gold says on its website. “Redevelopment will allow us to raise enough capital so we can properly take care of the environment.”
There is some opposition to the project. Shannon Wheeler, the Nez Perce Tribe executive committee chairman, wrote in February that “There is no question that the long history of mining at the Stibnite site has left this site in Idaho degraded and in need of healing. But betting on a new, enormous mine to do the cleanup is too risky for fish and wildlife, for the residents of Idaho and for the Nez Perce people, who have worked since the mid-1990s – expending approximately $2.5 million annually – to restore fish populations and fish habitat in the Salmon River watershed.”