Under the agreement, Barrick will spend $15m as work expenditure over a four year period to earn 70% interest in the Kan property. This is subject to certain yearly work expenditure and a guaranteed expenditure threshold of $6m in the first two years.
After completion of the Exploration Earn-In, the Kan Property will be entrusted to a joint venture entity where Osisko and Barrick will hold 30% and 70% interest, respectively. Following this, the two companies will also sign a joint venture agreement for the property.
Barrick will also have the option to gain an additional 5% interest in the property, totalling a 75% stake by providing additional $5m of project-level expenditures. This refers to preliminary economic assessments or pre-feasibility studies.
Located in Nunavik Territory in northern Québec, the Kan property is a large gold and base metal exploration project, which includes a surface area of about 30,000 hectares.
Exploration conducted in the 1990s led to the discovery of multiple gold deposits showing within the iron formation. Drill results returned 5.1g/t Au over 6m (Ferricrete Showing) and 9.46g/t Au over 2m (Kan Showing).
Virginia Mines conducted further explorations of the property between 2014 and 2016, which discovered further gold mineralisation associated with the silicate-carbonate iron formation on the Kan property.
Both parties have agreed to negotiate and enter into a definitive agreement with accordance to this binding deal, subject to customary conditions and regulatory approvals.