Mining firm Barrick Gold has signed an agreement to earn into and form a joint venture (JV) with Canadian firm Unigold, pertaining to the Neita Norte exploration concession in the Dominican Republic.

According to the binding term sheet, Unigold will grant an exclusive option to Barrick to acquire a 60% undivided interest in the 10,903ha Neita Norte exploration concession, which is valid for three years.

In exchange, Barrick will incur expenditures of at least $2.5m for the concession within the first three years. It will also incur a total expenditure of at least $8m related to the concession within the first six years and deliver a preliminary economic assessment (PEA).

Barrick will also incur at least $12m in total expenditures at the concession within the first eight years and deliver a pre-feasibility study (PFS).

Upon earn-in of a 60% interest in the concession, Barrick can elect to sole-fund and deliver a feasibility study for the project by the end of year 12. This will allow Barrick to increase its stake in the JV to 80%.

In a press statement, Unigold said: “The JV will be subject to standard dilution clauses, which includes the criteria that should any partner own less than 15% of the JV, they would be immediately diluted to a 2.5% NSR royalty. Barrick will be the manager and operator of the project.”

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Unigold will also work with Barrick to finalise a long-form agreement and a shareholder’s agreement. The firms will also create a joint-stock Dominican company, which will hold the concession permits within the next 60 days.

Unigold chairman and CEO Joe Hamilton said: “Barrick brings considerable technical and financial capability to the project. Barrick operates the world-class Pueblo Viejo mine in the Dominican Republic and has installed a significant amount of related infrastructure in the country, holding a commendable record as a good corporate citizen.

“The agreement creates an opportunity for both companies to benefit from the development of this frontier area. Unigold will continue to be active in the area as we concentrate on the development of the Neita Sur concession and work to convert our significant resources into producing mines.”