The Pueblo Grande concessions are adjacent to, and partially encircle, the Pueblo Viejo mine. Precipitate has reported drilling highlights up to 10.6m grading 2.96 grams per tonne gold, 2% copper and 9.4% zinc in the Tres Bocas area.
"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. Should Barrick's work prove successful in delineating a meaningful minable resource, Precipitate will be carried for a significant retained interest with no cash outlay by the company," said Precipitate president and CEO Jeffrey Wilson.
Barrick must incur a minimum US$10 million in exploration expenditures, including completion of at least 7,500m of drilling, and deliver a qualifying pre-feasibility study within six years.
At Precipitate's election following the approval of a feasibility study, Barrick will be obligated to provide Precipitate's portion of any debt financing or arrange for third-party financing of Precipitate's portion of any debt financing required to construct a mine in return for another 5% interest in the JV.
Barrick also agreed to subscribe for the Canadian dollar equivalent of $1 million of Precipitate's stock via a private placement. It will invest C$1.4 million to acquire 12.7 million shares, representing 12.02% of the outstanding shares of the junior.
"The injection of additional capital into from the US$1 private placement allows Precipitate to continue the advancement of its other Dominican Republic projects while gaining an important, long term shareholder with significant in-country prominence and expertise. Our exploration focus will immediately turn to near term drill targets emerging within the company's nearby Ponton gold project and the ongoing advancement of existing targets at the Juan de Herrera project, immediately adjacent to GoldQuest Mining's Romero project," Wilson said.
Shares in Precipitate Gold are trading at C12c, valuing the company at $11 million.