TORONTO — Barrick Gold Corp. entered into an agreement with Reunion Gold Corp. to form a 50-50 alliance to jointly explore for, develop and mine certain mineral projects in the Guiana Shield, including Guyana, Suriname, French Guiana and the North and Northeast Regions of Brazil.
Reunion, an exploration and development company, will initially contribute to the Alliance the Waiamu, Aremu, Arawini and Oko Projects, all located in Guyana. Barrick will initially fund an amount equal to $4.2 million on these projects, as credit for historical exploration expenditures by Reunion, with subsequent funding to be on a 50-50 basis between Reunion and Barrick.
As long as the strategic alliance agreement remains in effect, if Reunion acquires an interest or an option to acquire an interest in any mineral property in the subject area, Barrick will have 90 days to elect to include the new project in the alliance. Barrick can nominate an alliance project as a designated project, and has the right to earn a 70 percent interest by sole funding and completing a feasibility study for the project.
“The SAA expands Barrick’s exploration footprint in the Guiana Shield, a significantly underexplored region and one of the most prospective in the world for large scale gold discoveries,” said Barrick president and CEO Mark Bristow. “The alliance will seek to identify and acquire properties that have the potential to yield discoveries consistent with Barrick’s definition of Tier 1 mines, leveraging Reunion’s capabilities and proven track record in the region, combined with Barrick’s experience at advancing and developing world-class assets.”
Barrick has agreed to acquire up to 35,700,000 common shares of Reunion at a price of $0.11 per share. The aggregate consideration to be paid by Barrick in the offering is up to $4.08 million. The Reunion offering is expected to close on or about Feb. 6.
As a result of its additional investment, Barrick will own a total of up to 83,700,000 Reunion shares, increasing its interest in Reunion from approximately 15 percent to approximately 20 percent of Reunion’s issued and outstanding common shares.
Barrick will nominate one director to Reunion’s board of directors, has the right to participate in future equity financings by Reunion and will have the right to assign one or more geologists to work full time on any or all of Reunion’s mineral projects.