PRECIOUS METALS

Metalcorp triples, Melkior lifts a little on Barrick earn-in deals near Hemlo

Major to explore near Hemlo

Staff reporter
 Barrick Gold’s Hemlo operations in Ontario

Barrick Gold’s Hemlo operations in Ontario

Shares in junior Metalcorp more than trebled on Friday as it announced neighbour Barrick had entered a minimum C$3.7 million earn-in to its Hemlo East property.

Barrick operates the adjacent Hemlo gold mine, where it said last month it planned to extend the minelife by transitioning it to a "modernised tier two asset with a purely underground operation" as the openpit wound down.

Metalcorp said under the Hemlo East agreement, Barrick must pay an initial $3 million within three days of the TSX Venture Exchange accepting the agreement, plus spend at least $700,000 on exploration within the first year.

To earn up to 80%, Barrick must spend at least $4.5 million and deliver an NI 43-101 report within three years.

Barrick could withdraw at any time after the initial $3.7 million worth of commitments.

If the major completed the earn-in, the pair would form an 80:20 joint venture for Hemlo East with funding on a pro-rata basis.

Metalcorp had last raised $100,000 in September and settled debt for equity, both at 3c per share. Its website is under construction.

Shares (TSXV: MTC) in the Ontario-focused junior, which have traded about 3c for much of the past year, shot up 220% on Friday to close at 8c, capitalising it at $7.8 million (US$6 million).

Melkior deal

Meanwhile fellow TSXV-listed Melkior Resources said it had also closed an option/JV agreement with Barrick, at its White Lake project, 20km east of the Hemlo mine.

It said Barrick could earn up to 75% of White Lake by spending $4 million on exploration within five years.

The pair would then form a 75:25 joint venture.

"With Barrick as our partner to move the White Lake project forward, even a small discovery has the potential to be economic because of the property's proximity in relation to their processing facilities," Melkior CEO Jonathon Deluce said.

It's the junior's second deal with a gold producer after finalising an agreement with Kirkland Lake Gold in September, which will see Kirkland invest $1 million in the company and spend up to $110 million to earn 75% of Melkior's Carscallen project in Ontario.

Melkior shares (TSXV: MKR) have risen from 6c to a recent high of $1.25.

They gained 3.3% on Friday to close at 93c, capitalising it at $18.6 million (US$14.2 million).

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