The divestiture will enable the company to focus on its newly acquired Prescott Base Metals Project. Credit: Jason Benz Bennee / Shutterstock.

ASX-listed Somerset Minerals has agreed to sell the Valle del Tigre mineral concession, located in south-east Ecuador, to Barrick Gold.

Under the agreement, Barrick will pay Somerset $320,194 for the project.

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Upon completion of the transaction, which is scheduled for the December quarter of this year, Barrick will issue Somerset a 1.5% net smelter royalty over the project area.

Under a buy-down provision in the royalty deal, Barrick can reduce the royalty to 0.5% for a fixed price of $1m.

Additionally, Barrick will have the right of first refusal on the transfer or assignment of the royalty or any rights under the agreement by the royalty holder.

In 2019, Somerset acquired the Zamora Projects in the Cordillera del Condor mineral belt of south-east Ecuador. The Zamora Projects include the Valle del Tigre and the Rio Zarza projects.

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After the completion of the transaction, Somerset will continue to hold the Rio Zarza Project.

Somerset noted that the divestiture of the Valle del Tigre II mineral concession will help it prioritise its newly acquired Prescott Base Metals Project in Nunavut, Canada.

Somerset managing director Chris Hansen said: “We are excited to announce the agreement with Barrick for the sale of the Valle del Tigre II project.

“This transaction not only brings substantial value to our shareholders but also allows us to focus our efforts on the newly acquired Prescott Base Metals Project in Nunavut, Canada.

“With exploration activities already underway at Prescott, we eagerly anticipate the completion of the geophysical survey in July, followed by a targeted geochemical program in early August. We believe this strategic shift will enhance our focus, and we are incredibly excited to see the potential that the Prescott Project can deliver.”