3 Junior Explorers Team Up With Producers

Junior exploration companies Red Metal Ltd., Mirasol Resources, and Reunion Gold have teamed up with OZ Minerals, Newcrest International, and Barrick Gold, respectively, to form exploration alliances on the junior companies’ exploration projects. The Red Metal-OZ agreement covers six projects in Australia. The Mirasol- Newcrest agreement is focused on Mirasol’s Gorbea gold projects in northern Chile. The Reunion-Barrick agreement covers Reunion projects on the Guiana Shield in northern South America.

Red Metal and OZ have signed an option and joint-venture agreement aimed at fast-tracking the search for discoveries on Red Metal’s base-metals exploration portfolio. The agreement provides OZ with a two-year option to fund a series of mutually agreed, proof-of-concept work programs on six Red Metal early-stage projects: the Yarrie copper-gold/copper-cobalt and Nullarbor copper-gold/copper-nickel projects in Western Australia, and the Gulf copper-gold and Three Ways, Lawn Hill, and Mount Skipper zinc-lead-silver projects in Queensland.

OZ has committed to spending a combined total of A$8.05 million on the projects over a two-year period. After completion of the minimum expenditure commitment on a project, OZ will have the option to trigger formation of a joint venture over that project whereby it can earn 51% by spending a designated earnin amount on exploration within a designated earn-in period. Red Metal will manage the exploration to the end of the earn-in period. Once OZ Minerals has earned 51% of a particular project, Red Metal can elect to contribute pro-rata to future exploration and development costs and retain a 49% interest or elect not to contribute and be diluted to a 30% interest at completion of a positive decision to mine.

Mirasol and Newcrest have signed a binding letter agreement that provides Newcrest with an option to farm into Mirasol’s Gorbea high-sulphidation epithermal gold projects. The agreement covers a package of projects totaling 26,684 ha, including the Atlas gold-silver and the Titan gold-copper-lead projects. Newcrest may acquire up to 75% of the Gorbea projects in multiple stages by completing a series of exploration and development milestones and making staged option payments to Mirasol. Newcrest has committed to spending a minimum of $4 million and to completing a minimum of 3,000 m of drilling over an initial 18-month period. Newcrest will operate the exploration program.

Newcrest and Mirasol are working to advance the Gorbea drill permitting process and to upgrade the exploration camp ahead of a planned first-quarter 2019 restart of the exploration program, which will initially focus on the Atlas project. The scale of the Atlas gold-silver system, combined with the relatively modest amount of exploration drilling to date and the range of priority targets, highlights the project as a large, under-explored system, requiring further drill testing to identify potential large-tonnage, bulk-minable, gold-silver mineralization.

Reunion and Barrick have formed a 50:50 alliance to jointly explore, develop, and mine certain mineral projects in the Guiana Shield, including in Guyana, Suriname, French Guiana, and the north and northeast regions of Brazil. Concurrently, Barrick has increased its interest in Reunion to 19.9% through participation in Reunion’s previously announced private placement offering. Reunion will initially contribute the Waiamu, Aremu, Arawini, and Oko projects, all in Guyana. Barrick will initially fund $4.2 million for these projects as credit for historical exploration expenditures by Reunion, with subsequent funding to be on a 50:50 basis between the companies.

Barrick can at any time designate an included project as a “designated project.” Following such designation, Barrick will sole fund the project until completion of a feasibility study. Upon completion of a feasibility study, Barrick’s interest in the project will increase to 70%, and Reunion will retain a 30% interest. If Barrick does not deliver a feasibility study, the project returns to the alliance as an included project. Reunion will manage all exploration projects within the alliance until such projects are defined as designated projects. Barrick will manage all designated projects.

As featured in Womp 2019 Vol 03 - www.womp-int.com