Canadian firm Barrick Gold has signed an option agreement with Kenorland Minerals to acquire a stake in the South Uchi project in Ontario.

Under the agreement, Barrick will have the option to earn an initial 70% interest in the project by spending $4.6m (C$6m) on mineral exploration within six years. This includes $2.3m (C$3m) in guaranteed expenditures within the first three years.

The company is also required to deliver the project’s NI 43-101 compliant technical report that establishes a mineral resource of at least one million ounces (Moz).

In a statement, Kenorland Minerals said: “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.”

In the event of Barrick exercising the 70% interest, a joint venture (JV) will be formed between Barrick and Kenorland on the project.

Barrick will then have an option to earn a 10% additional stake in the project in exchange for funding the project feasibility study by the tenth anniversary of the option agreement.

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An option will be granted to Kenorland to forego a minority JV interest in the project and vest a net smelter returns royalty interest.

The South Uchi Project is located within the Birch-Uchi greenstone Belt, in the Red Lake district of northwestern Ontario.

The project area covers a portion of Confederation Assemblage volcanic rocks and the boundary between the sedimentary-dominated English River subprovince to the south and volcanic-dominated Uchi subprovince to the north.

In addition to gold prospectivity, the project is believed to meet most of the criteria for potential lithium pegmatite deposits.