GFG Resources (GFG.V) Tuesday said it signed an agreement for Barrick Mining (ABX.TO) to earn an initial 60% interest in GFG's Pen Gold Project in Ontario.
Barrick will make a cash payment of C$1.2 million to GFG and fund C$17.7 million in exploration and project expenditures. The company has committed to fund at least C$4 million in qualifying expenditures within the first three years, a statement said.
Barrick, who will be the operator during the initial earn-in period and manage exploration programs at Pen, may increase its interest to 70% by solely funding a preliminary economic assessment and to 80% by solely funding a feasibility study, the statement added.
"This proposed partnership represents a significant value-creating opportunity for GFG shareholders and a strong endorsement of the scale and quality of the Pen Gold Project," said GFG Chief Executive Brian Skanderbeg. "The transaction provides for substantial partner-funded exploration, meaningful near-term drilling and a pathway to advance Pen through resource definition and potentially feasibility, while GFG retains significant exposure to future success."
GFG shares were last seen down C$0.005 at C$0.23 on the TSX Venture Exchange.
Price: $67.59, Change: $+0.96, Percent Change: +1.44%