Hemlo Explorers (TSXV: HMLO) has entered into a major agreement with that of Barrick Gold (TSX: ABX). The two firms this morning entered into a binding term sheet that will see Barrick obtain an earn-in right to a portion of the Pic Project.
The arrangement will see Barrick obtain the right to earn into 910 claims covering 16,800 hectares of the Pic Project, which is 25 kilometres to the west of Barrick’s Hemlo Mine. Under the terms of the arrangement, the company can earn up to an 80% stake in the claims by conducting a pre-feasibility study within the next six years.
The earn-in right is subject to the company spending $0.8 million on the property in the first year, and having at least $1.0 million in expenditures on each anniversary of the definitive agreement thereafter. The arrangement can be extended by up to two years with a $0.5 million payment to Hemlo for each year extended.
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“Hemlo Explorers has moved its Pic Project to a point where it was ready to option to a major. We believe that we have the best possible partner to complete this program. We are excited to work with Barrick in bringing this project forward,” commented CEO Brian Howlett.
In consideration for the earn-in agreement, Barrick has agreed to invest in Hemlo the lesser of a 5% stake and $300,000 via a private placement of common shares into the company.
Finally, the company also indicated that it intends to continue exploration on the southwestern corner of the Pic Project, referred to as Project Idaho. The region is believed to be analogous to the geology at Generation Mining’s Marathon palladium-copper project to the west which is now under development.
Hemlo Explorers last traded at $0.22 on the TSX Venture.
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