Barrick Gold has signed an earn-in agreement with precious and base metals explorer Precipitate Gold to acquire a 70% stake in the company’s Pueblo Grande project.

The Pueblo Grande project is located next to Barrick’s Pueblo Viejo mine in the Dominican Republic. Pueblo Viejo is a joint venture between Barrick Gold (60%) and Newmont Goldcorp (40%).

As conditions of the agreement, Barrick will have to invest a minimum of $10m in exploration and deliver a pre-feasibility study within six years of the agreement.

As part of the deal, Barrick has also agreed to subscribe for $1m of Precipitate’s common shares through a private placement.

Precipitate Gold president and CEO Jeffrey Wilson said: “We are pleased to announce the agreement with Barrick whereby one of the largest gold mining companies in the world has agreed to a substantial earn-in arrangement to advance our 100% owned Pueblo Grande Project to a pre-feasibility stage in exchange for a 70% interest.

“The work expenditure commitments and expeditious timeline to completion of a pre-feasibility study supports the company’s belief that the Pueblo Grande Project represents an important and prospective land package warranting a substantial budget for extensive property-wide exploration and drilling.

“Barrick’s technical and financial capacity to conduct this work provides Precipitate shareholders with upside leverage, while mitigating risk and limiting potential share dilution to finance work programmes of this scale.”

The deal comes more than a year after Precipitate took over all of Everton’s Dominican Republic exploration concessions, consisting of the Pueblo Grande project and the Ponton project.

Last month, Barrick Gold announced its plans to extend the life of the Pueblo Viejo gold mine beyond 2040.