Barrick Gold has signed an option agreement with Canadian firm Latin Metals to acquire up to 85% in exploration properties in Santa Cruz province, Argentina. 

Through its wholly owned subsidiary, the deal offers Barrick Gold the right to purchase a stake of up to 85% in Latin Metals’ Cerro Bayo, Cerro Bayo Sur and La Flora properties. 

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These properties are subject to an underlying option agreement, signed by Latin Metals with the underlying vendor in 2019 to earn a 100% stake in the three properties.

To earn an initial 70% stake, Barrick is required to pay $750,000 in cash to Latin Metals and $2.32m to the underlying vendor.

Barrick will also incur $5m on exploration work and prepare a preliminary economic assessment on the properties for Latin Metals.

Barrick has to make another payment of $425,000, ‘sole fund all costs’ and deliver a pre-feasibility study to earn a further 15% stake.

Upon completion of the initial 70% option, Barrick Gold and Latin Metals will form a joint venture (JV) with Barrick holding a 70% interest. Latin Metals will own the remaining 30% stake.

The interests of Barrick and Latin Metals will become 85% and 15% respectively in the JV, once the second option is complete.

Latin Metals president and CEO Keith Henderson said: “Barrick is a good partner who brings considerable technical and financial capability to the project.

“Assuming that the earn-in agreement runs to full term, Barrick’s investment of around $8.5 million will include payments to the underlying vendor, payments directly to Latin Metals and funding of work on the ground; all of which will help to limit dilution to Latin Metals’ shareholders.

“The earn-in agreement is consistent with the company’s prospect generator model, and the work contemplated, if successful, would advance the projects considerably, while Latin Metals will retain a minority interest.”

Last year, Latin Metals acquired the 4,000ha Yanba copper exploration project in the Coastal Copper Belt, Peru, from an undisclosed firm.