Malbex Resources Inc. and Barrick Gold Corporation Enter into Earn-in Arrangements on the Del Carmen Project, Argentina
22 April 2014 - 2:47PM
Marketwired
Malbex Resources Inc. and Barrick Gold Corporation Enter into
Earn-in Arrangements on the Del Carmen Project, Argentina
TORONTO, ONTARIO--(Marketwired - Apr 22, 2014) - Malbex
Resources Inc. ("Malbex") (TSX-VENTURE:MBG) is pleased to announce
that it has entered into an agreement with Barrick Gold Corporation
("Barrick") relating to Malbex's Del Carmen project in San Juan
Province, Argentina (the "Del Carmen Project") whereby Barrick will
have the option to earn in to a 51%, and then a 75%, interest in
the Del Carmen Project based on meeting certain expenditure
requirements. In conjunction with the earn-in arrangements, Barrick
has agreed to subscribe for an aggregate of 14,285,714 common
shares of Malbex ("Common Shares") for an aggregate subscription
price of C$1,000,000 (the "Private Placement").
The closing of the
Private Placement and the earn-in arrangements is conditional on,
among other things, Malbex causing the exploration agreement
covering the Del Carmen Project to be transferred to a newly-formed
entity jointly-owned by wholly-owned subsidiaries of Barrick and
Malbex (the "Joint Venture Company"), the extension of such
exploration agreement, the delivery of required work and
environmental permits for the Del Carmen Project and the approval
of the TSX Venture Exchange ("TSX-V"). The transfer of the
exploration agreement to the Joint Venture Company requires the
prior approval of the Instituto Provincial de Exploraciones y
Explotaciones Mineras ("IPEEM") of the San Juan Province,
Argentina. Formal application to transfer the exploration agreement
is expected to be made to IPEEM shortly.
"We welcome Barrick
to the Del Carmen Project," commented Joe Hamilton, CEO of Malbex.
"Barrick brings a depth of technical and regional expertise that is
impossible to match. While Malbex personnel were successful in
identifying and categorizing significant epithermal mineralization
at Rojo Grande, the recent Preliminary Economic Assessment
indicated that the economics of the project could be significantly
enhanced by extending gold mineralization beyond the current
resources. Barrick is most familiar with these systems in the Andes
and has operated successfully in the area for decades. We look
forward to their participation and operating expertise as we
continue to move the project towards feasibility."
Shareholders'
Agreement
The Joint Venture
Company will initially be 95% owned by Malbex and 5% owned by
Barrick. Pursuant to the shareholders' agreement to be entered into
by the parties to govern the operation, management and control of
the Joint Venture Company (the "Shareholders' Agreement"):
- Barrick will be the operator of the Del Carmen Project
responsible for managing, directing and controlling operations at
the project.
- Barrick will have the option to earn a 51% interest in the
Joint Venture Company by incurring an aggregate of US$21 million in
exploration expenditures on the Del Carmen Project on or prior to
the fifth anniversary of the execution of the Shareholders'
Agreement (the "First Earn-in Period"). The proceeds of the Private
Placement will count towards these expenditures.
- In the two years following the First Earn-in Period (the
"Second Earn-in Period"), Barrick will have the option to further
increase its ownership of the Joint Venture Company from 51% to 75%
by incurring an aggregate of US$20 million in additional
exploration expenditures on the Del Carmen Project.
- Following the expiry of the Second Earn-in Period (the
"Proportionate Funding Period"), each of Malbex and Barrick will be
required to fund its respective proportionate share of all
expenditures relating to the Del Carmen Project. If a shareholder
fails to advance their proportionate share of expenditures, the
shareholdings of such shareholder will be diluted in accordance
with the terms of the Shareholders' Agreement.
- If a shareholder's ownership stake in the Joint Venture Company
falls below 10% at any time during the Proportionate Funding
Period, such shareholder's shares will be converted into a 2% net
smelter royalty on the Del Carmen Project.
If the Private
Placement does not close by October 21, 2014, including as a result
of IPEEM not providing its approval in respect of the transfer of
the exploration agreement to the Joint Venture Company, either
party has the right to terminate the transaction. Following the
closing of the Private Placement, Barrick will own approximately
9.7% of the issued and outstanding Common Shares. The Common Shares
to be issued in connection with the Private Placement will only be
subject to a four month hold period pursuant to applicable Canadian
securities laws and the rules of the TSX-V.
Technical
information contained in this news release has been reviewed and
approved by Joseph A. Hamilton, M.Sc., P.Geo. a Qualified Person as
defined by National Instrument 43-101 - Standards of Disclosure
for Mineral Projects ("NI 43-101").
About Malbex
Malbex is a gold
exploration company led by experienced management and directors
with projects in Argentina. In April 2010, Malbex made a
near-surface, gold-silver oxide discovery at Del Carmen, its lead
project in Argentina.
The Del Carmen
project is located in the El Indio Gold Belt, which contains more
than 35 million ounces of gold in current reserves and past
production, including Barrick's Veladero mine and Pascua-Lama
project. For more information, please visit www.malbex.ca.
CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING INFORMATION: This news release includes
certain information that may constitute "forward-looking
information" under applicable Canadian securities legislation.
Forward-looking information includes, but is not limited to,
statements about closing of the private placement and joint venture
transaction with Barrick and obtaining consent from IPEEM for the
transfer of the Exploration Agreement. Forward-looking information
is necessarily based upon a number of estimates and assumptions
that, while considered reasonable, are subject to known and unknown
risks, uncertainties, and other factors which may cause the actual
results and future events to differ materially from those expressed
or implied by such forward-looking information, including the risks
identified in the Malbex's annual information form under the
heading "Risk Factors". There can be no assurance that such
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance
on forward-looking information. All forward-looking information
contained in this press release is given as of the date hereof and
is based upon the opinions and estimates of management and
information available to management as at the date hereof. Malbex
disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
law.
Neither the
TSX-V nor its Regulation Services Provider (as that term is defined
in the policies of the TSX-V) accepts responsibility for the
adequacy or accuracy of this release.
Malbex Resources Inc.Joe HamiltonPresident and Chief Executive
Officer(416) 628-0215ir@malbex.cawww.malbex.ca
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