THUNDER BAY – MetalCorp Limited (TSXV – MTC) has announced that it has entered into an earn-in agreement with Barrick Gold Inc. a wholly-owned subsidiary of Barrick Gold Corporation, relating to MetalCorp’s Hemlo East gold property located about 350 kilometers east of Thunder Bay, Ontario. Barrick is currently operating the Williams and David Bell Gold Mines which are adjacent to the Hemlo East Property. Over 21 million ounces of gold have been produced to date from the Hemlo gold deposits. The Earn-In Agreement is subject to acceptance by the TSX Venture Exchange.
“We are pleased to enter into this agreement with Barrick and look forward to our joint venture with them,” commented Donald Sheldon, the Chief Executive Officer of MetalCorp. “Our shareholders recognize the value of the Hemlo East property and we have always believed in the potential it represents for creating value for their investment. We believe that in Barrick we have secured the right joint venture party to move this project forward.”
The Earn-In Agreement provides that Barrick has the right and option to earn an 80% interest in the Hemlo East Property upon satisfaction of certain conditions.
During the earn-in period, Barrick will be the operator of the Hemlo East Property and will manage and execute all exploration programs and spending on the Hemlo East Property.
Barrick may withdraw from the earn-in at any time, provided it has paid to MetalCorp the Cdn$3,000,000 Initial Payment and fulfilled its obligation to fund the Cdn$700,000 Guaranteed Amount of expenditures on the Hemlo East Property.
After completion of the earn-in, Barrick and MetalCorp will form a joint venture company to hold the Hemlo East Property, to be owned 80% by Barrick and 20% by MetalCorp with funding on a pro-rata basis. Dilution of a shareholder’s interest below 10% will result in the conversion of the interest to a 2% Net Smelter Return royalty. The party holding a majority of shares will be the operator of the JVCo.
MetalCorp is a mineral exploration company based in Thunder Bay, Ontario, with gold, PGE and base metal projects in the Canadian Shield of Northern Ontario, Canada, one of the most prolific mineral districts in the world.