Barrick and Reunion Gold Announce Strategic Alliance for Future South American Projects

1401
barrick gold

Gold speculators have had plenty to look forward to, as analysts and central banks continue to project the yellow metal’s price rising steadily in 2019. This prediction comes alongside a number of major mergers and agreements with big gold miners across the world.

The world’s largest bullion producer Barrick Gold (TSX: ABX)(NYSE: GOLD) announced today it had signed an agreement with fellow miner Reunion Gold (TSXV: RGB) to jointly explore and develop potential projects in the North Atlantic coast of South America.



The agreement lets Barrick tighten its control on four of the Guyana-based projects that Reunion already operates. As agreed in the deal, Barrick will invest $4.2 million in those four assets, as credit for exploration already conducted by Reunion. Future funding would be split on a 50:50 basis between the two company. The northern region of South America remains largely underexplored and is one of the most attractive areas for large scale gold discoveries.

The SAA expands Barrick’s exploration footprint in the Guiana Shield, a significantly underexplored region and one of the most prospective in the world for large scale gold discoveries,” said Barrick President and CEO Mark Bristow. “The Alliance will seek to identify and acquire properties that have the potential to yield discoveries consistent with Barrick’s definition of Tier 1 mines, leveraging Reunion’s capabilities and proven track record in the region, combined with Barrick’s experience at advancing and developing world-class assets.”

Toronto-based Barrick, which already owns 15 percent of Reunion, will buy up to 35,700,000 shares of the junior miner at a price of C$0.15 per share. This would bring Barrick’s ownership of the company to just under 20 percent.

The announcement is another example of an ongoing trend in the gold mining sector of mergers and acquisitions. Senior gold companies are making investments in younger companies, considering them a low-risk bet without risking too much capital in the hopes it will pay off in the form of new gold production.

Barrick’s already made a number agreements similar to this one with Reunion. Last year, the company paid $8.3 million to ATAC Resources Ltd, a $1.6 million into Royal Road Minerals Limited, as well as a $38 million investment in Midas Gold (TSXV: MAX). Barrick’s stock moved up 1 percent in response to the news, a small gain but an understandable one considering the maturity of the company.




Barrick Gold Company Profile

Barrick Gold Corporation (Barrick), incorporated on March 10, 1995, is a gold mining company. The Company is principally engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development.

The Company’s segments include Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero, Turquoise Ridge, Acacia Mining plc (Acacia), Pascua-Lama and Other Mines. Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge are its individual gold mines. The Company, through its subsidiary, Acacia, owns gold mines and exploration properties in Africa. It also holds interest in gold mines, including Porgera and Kalgoorlie, and copper mines, such as Zaldivar and Lumwana. – Reuters

Reunion Gold Company Profile

Reunion Gold Corporation engages in the acquisition, exploration, and development of mineral properties in South America. The company primarily explores for gold deposits. It holds an option to acquire interest in six gold projects in French Guiana and Guyana. The company was formerly known as New Sleeper Gold Corporation and changed its name to Reunion Gold Corporation in June 2006. Reunion Gold Corporation is headquartered in Toronto, Canada. – Bloomberg



NO COMMENTS

LEAVE A REPLY