It may have taken longer than planned, but Hemlo Explorers (TSXV: HMLO) has finally closed a definitive agreement with that of Barrick Gold Corp (TSX: ABX). The arrangement will see Barrick earn up to an 80% interest in a portion of Hemlo’s Pic Project.
The arrangement will see Barrick earn up to an 80% interest in the property via the delivery of a pre-feasibility study within six years of the definitive agreement being signed. The time frame of the arrangement can be extended by up to two years via the payment of $0.5 million for each one-year extension.
Work expenditures on the property meanwhile are to amount to $1.0 million per annum. If the arrangement is successfully completed, Barrick and Hemlo will enter into a joint venture agreement for the property, which will see Hemlo maintain its 20% interest in the property.
As part of the arrangement, Barrick is also to subscribe to a small financing for 1.8 million common shares at $0.1052 per share, resulting in proceeds of just under $194,000 for Hemlo. Proceeds are to be used for general corporate purposes and the advancement of Hemlo’s projects.
While the specific details were excluded in today’s announcement, Hemlo has previously indicated that the arrangement is to apply to a total of 910 claims that cover 16,800 hectares of the Pic Project. The property is significant for Barrick in that it is found just 25 kilometres west of its Hemlo Mine.
Hemlo Explorers last traded at $0.095 on the TSX Venture.
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