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  • Golden Minerals (TSX:AUMN) has signed an earn-in agreement with Barrick Gold (TSX:ABX) regarding the El Quevar project in Argentina
  • Under the agreement, Barrick will invest C$1.57 million in Golden Minerals for a 70 per cent stake in El Quevar
  • In order to be eligible, Barrick must also contribute $15.7 million to exploration and deliver an NI 43-101-compliant Pre-Feasibility Study
  • To hold the El Quevar properties, the companies will form a new entity, 30 per cent and 70 per cent owned by Golden Minerals and Barrick, respectively
  • Golden Minerals (AUMN) is up 4.92 per cent to $0.27, while Barrick Gold (ABX) is up 7.21 per cent to $33.75 per share

Golden Minerals (TSX:AUMN) has signed an earn-in agreement with Barrick Gold (TSX:ABX) regarding the El Quevar project in Argentina.

Per the agreement, Barrick will acquire an option to purchase a 70 per cent stake in the El Quevar site. The El Quevar site is located in the northwest Salta Province.

Barrick’s first step invest C$1.57 million in Golden Minerals via a private placement on the NYSE, at $0.33 per share.

To be eligible for the 70 per cent stake, Barrick must invest $15.7 million in exploration efforts over eight years. This has been broken down to $790,000 annually in years one and two, $1.57 million annually in years three, four and five, and $3.14 million annually in years six, seven, and eight.

Barrick must also provide an NI 43-101-compliant Pre-Feasibility Study. The study must describe a potentially profitable operation with mineral resources of at least 2 million gold equivalent ounces.

Golden Minerals CEO, Warren Rehn, expressed his pleasure to have Barrick as a partner in the exploration agreement.

“Barrick’s interest in exploring the El Quevar district underscores, as we have long maintained, the excellent potential of the high sulfidation epithermal systems at El Quevar to host additional important discoveries.

“This agreement sets a reasonable base value on our existing asset and allows for substantial upside if Barrick is successful in its exploration efforts at El Quevar,” he added.

To facilitate the agreement, Golden Minerals will form a new entity which will hold the El Quevar properties. Following the earn-in, Barrick and Golden Minerals will own 70 per cent and 30 per cent of the entity, respectively.

The two companies will proportionally split funding of the new entity between them. Standard dilution mechanisms will apply in the case of funding shortfalls by either party.

Golden Minerals (AUMN) is up 4.92 per cent to $0.27 per share. Barrick Gold (ABX) is up 7.21 per cent to $33.75 per share at 12:55pm EST.

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