Nevada Gold Mines to Consolidate South Arturo Property in Exchange for Lone Tree and Buffalo Mountain Properties
September 07 2021 - 6:00AM
Nevada Gold Mines (NGM) has entered into a definitive asset
exchange agreement (the “Exchange Agreement”) to acquire from i-80
Gold Corp. the 40% interest in the South Arturo Joint Venture that
NGM does not already own as well as a low-cost option to acquire
the adjacent Rodeo Creek exploration property, in exchange for the
Lone Tree and Buffalo Mountain properties and infrastructure which
are currently in care and maintenance. The exchange transaction
will have an effective date of June 1, 2021.
The transaction provides NGM with a number of
key benefits:
- Allows NGM to
consolidate production from the South Arturo open pit and the El
Niño underground in the short term and capture 100% of the
longer-term upside on both orebodies
- Provides NGM
with flexibility to pursue other potential operational synergies at
Goldstrike
- Provides NGM
with a low-cost option to acquire 100% of the Rodeo Creek property
comprised of exploration ground adjacent to South Arturo
- Removes NGM’s
Lone Tree closure liability with i-80 Gold providing replacement
bonding for reclamation obligations as a condition to closing
- Allows NGM to share in any future
production at Lone Tree through a contingent payment of up to $50
million (described below)
“This is a win-win transaction for both Nevada
Gold Mines and i-80” said Greg Walker, Executive Managing Director
of NGM. “Through the acquisition of Lone Tree, an asset not being
utilized by NGM has become a transformational asset for i-80. In
return, NGM’s acquisition of i-80’s 40% of the South Arturo Joint
Venture secures additional ounces with both open-pit and
underground optionality for our Carlin operation. We are excited
for the opportunities and growth this deal will bring to both
parties which will strengthen the mining industry in Nevada
providing benefits for all.”
The Exchange Agreement provides for payment to
NGM of contingent consideration of up to $50 million based on
mineral resources from the Lone Tree property. In connection with
the asset exchange, NGM will also enter into toll-milling
agreements providing i-80 Gold with interim processing capacity at
NGM’s autoclave facilities until the earlier of the three-year
anniversary of the asset exchange and the date on which the Lone
Tree facility is operational and at NGM’s roaster facilities for a
10-year period. NGM has also agreed to reimburse i-80 Gold an
amount of approximately $7.3 million for certain funding previously
advanced by i-80 Gold in respect of South Arturo.
Conditional on the closing of the Exchange
Agreement, NGM will subscribe for common shares in i-80 Gold, equal
to the lesser of a 9.9% interest or subscription proceeds of $50
million, becoming one of i-80’s largest shareholders.
As a condition to closing of the Exchange
Agreement, i-80 Gold will assume the environmental liabilities for
the Lone Tree and Buffalo Mountain properties and will be
responsible for securing replacement closure bonding and a release
of NGM’s existing bonds. Similarly, NGM will assume the
environmental liabilities and bonding obligations for South Arturo
and Rodeo Creek.
Closing of the transactions contemplated by the
Exchange Agreement is subject to the satisfaction of a number of
conditions precedent, including clearance under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended
(the “HSR Act”), arrangement by i-80 Gold of substitute sureties in
respect of the Lone Tree and Buffalo Mountain reclamation
obligations, and the approval of the Toronto Stock Exchange
("TSX"), among other customary conditions to closing.
About Nevada Gold MinesNevada
Gold Mines is operated by Barrick Gold Corporation
(NYSE:GOLD)(TSX:ABX) and is a joint venture between Barrick (61.5%)
and Newmont (38.5%) that combined their significant assets across
Nevada in 2019 to create the single largest gold-producing complex
in the world.
ENQUIRIES |
|
|
Catherine RawBarrick COO, North AmericaTel: +1 416
307 5157Email: craw@barrick.com |
Greg WalkerNGM Executive Managing DirectorTel: +1
702 526 3194Email: gwalker@nevadagoldmines.com |
Kathy du PlessisInvestor and media relationsTel:
+44 20 7557 7738Email:Barrick@dpapr.com |
Cautionary Statement on Forward-Looking
Information Certain information contained or incorporated
by reference in this press release, including any information as to
Barrick’s and Nevada Gold Mines’ strategy, projects, plans or
future financial or operating performance, constitutes
“forward-looking statements”. All statements, other than statements
of historical fact, are forward-looking statements. The words
“agreement”, “estimated”, “contingent”, “proposed”, “conditional”,
“expect”, “anticipate”, “potential”, “may”, “will”, “can”, “could”
and similar expressions identify forward-looking statements. In
particular, this press release contains forward-looking statements
including, without limitation, with respect to: the anticipated
benefits to NGM from the consolidation of NGM’s interest in the
South Arturo property in exchange for its Lone Tree and Buffalo
Mountain properties including the potential for South Arturo to
provide additional ounces to NGM’s Carlin operation and to
facilitate other operational synergies while reducing closure
liabilities; the potential acquisition by NGM of the Rodeo Creek
property; the estimated contingent cash consideration to NGM from
the exchange transaction; the duration of interim processing
capacity provided by NGM to i-80 Gold under toll-milling
agreements; the proposed investment by NGM in the shares of i-80
Gold and the reimbursement by NGM of certain funding previously
provided by i-80 Gold; the expected timing for i-80 Gold to assume
the environmental liabilities for the Lone Tree and Buffalo
Mountain properties and to secure replacement closure bonding for
those properties; the satisfaction of the closing conditions to the
transaction; and anticipated benefits from transaction for the
community and for Nevada.
Forward-looking statements are necessarily based
upon a number of estimates and assumptions including material
estimates and assumptions related to the factors set forth below
that, while considered reasonable by Barrick as at the date of this
press release in light of management’s experience and perception of
current conditions and expected developments, are inherently
subject to significant business, economic and competitive
uncertainties and contingencies. Known and unknown factors could
cause actual results to differ materially from those projected in
the forward-looking statements and undue reliance should not be
placed on such statements and information. Such factors include,
but are not limited to: fluctuations in the spot and forward price
of gold, copper or certain other commodities (such as silver,
diesel fuel, natural gas and electricity); risks that regulatory or
other approvals necessary to complete the transaction contemplated
by the Exchange Agreement may not be obtained or that conditions to
closing may not be satisfied; risks that the contingent
consideration will not be paid when due; changes in national and
local government legislation, taxation, controls or regulations
and/or changes in the administration of laws, policies and
practices; expropriation or nationalization of property and
political or economic developments in Nevada and the United States;
timing of receipt of, or failure to comply with, necessary permits
and approvals; contests over title to properties, particularly
title to undeveloped properties, or over access to water, power and
other required infrastructure; the liability associated with risks
and hazards in the mining industry, and the ability to maintain
insurance to cover such losses; increased costs and physical risks,
including extreme weather events and resource shortages, related to
climate change; damage to Barrick’s or NGM’s reputation due to the
actual or perceived occurrence of any number of events, including
negative publicity with respect to Barrick’s handling of
environmental matters or dealings with community groups, whether
true or not; risks related to operations near communities that may
regard Barrick’s operations as being detrimental to them;
litigation and legal and administrative proceedings; risks
associated with working with partners in jointly controlled assets;
Barrick’s ability to successfully integrate acquisitions or
complete divestitures; and risks associated with diseases,
epidemics and pandemics, including the effects and potential
effects of the global Covid-19 pandemic. In addition, there are
risks and hazards associated with the business of mineral
exploration, development and mining, including environmental
hazards, industrial accidents, unusual or unexpected formations,
pressures, cave-ins, flooding and gold bullion, copper cathode or
gold or copper concentrate losses (and the risk of inadequate
insurance, or inability to obtain insurance, to cover these
risks).
Many of these uncertainties and contingencies
can affect our actual results and could cause actual results to
differ materially from those expressed or implied in any
forward-looking statements made by, or on behalf of, Barrick.
Readers are cautioned that forward-looking statements are not
guarantees of future performance. All of the forward-looking
statements made in this press release are qualified by these
cautionary statements.
Specific reference is made to the most recent
Form 40-F/Annual Information Form on file with the SEC and Canadian
provincial securities regulatory authorities for a more detailed
discussion of some of the factors underlying forward-looking
statements, and the risks that may affect Barrick’s ability to
achieve the expectations set forth in the forward-looking
statements contained in this press release.
Barrick disclaims any intention or obligation to
update or revise any forward-looking statements whether as a result
of new information, future events or otherwise, except as required
by applicable law.
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