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Kenorland Minerals options South Uchi project to Barrick Gold

Published by , Editor
Global Mining Review,

Kenorland Minerals Ltd has entered into a property option agreement with a wholly-owned subsidiary of Barrick Gold Corp., pursuant to which the company has agreed to grant to Barrick the option to acquire up to an 80% interest in the South Uchi project, located within the Birch-Uchi greenstone Belt, in the Red Lake district of Northwestern Ontario.

Kenorland Minerals options South Uchi project to Barrick Gold

Pursuant to the option agreement, Barrick can earn an initial 70% interest in the project by incurring an aggregate of CAN$6 million in mineral exploration expenditures on or before the sixth anniversary of the option agreement (of which CAN$3 million are guaranteed expenditures within the first three years) and deliver a technical report in respect of the project that establishes a mineral resource of at least 1 million oz of gold prepared in accordance with the requirements of National Instrument 43-101 of the Canadian Securities Administrators. As part of its exploration expenditures, Barrick will reimburse the company for its sunk costs in relation to the project and its costs incurred in exercising an underlying option that comprises part of the project.

Following the earning of a 70% interest, Barrick and Kenorland will form a joint venture in respect of the project. However, Kenorland will have the option to forego a minority joint venture interest and immediately vest a net smelter returns royalty interest of 3% on currently unencumbered claims and 2% on claims currently encumbered by an existing royalty. If a joint venture is formed, Barrick will have an option to earn an additional 10% interest in the project (for a total of 80%) by solely funding a feasibility study on or before the 10th anniversary of the option agreement. In the event a joint venture participant dilutes to below 10% it will exchange its joint venture interest for a net smelter returns royalty of 2% on currently unencumbered claims and 1% on claims currently encumbered by an existing royalty.

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