The proposed deal covers the Vancouver-based junior’s 64 existing exploration licences in the country, which comprise 1,724 sq. km, plus possible acquisitions.
Eurasian will be the operator of the joint venture, with Barrick spending $2 million on regional exploration (with not less than $500,000 to be spent in the first year).
During the term of the joint venture, Barrick may elect to advance any property to “designated project” status. Eurasian, for its part, may make an area a designated-project candidate once $70,000 has been spent there, at which time Barrick may choose to advance the project to designated-project status or decline, in which case Eurasian may advance that property on its own terms.
Barrick can earn a half-interest in a designated project by spending $5 million, and can earn a further 20% by spending another $5 million. Minimum annual spending requirements on a designated project over a maximum 6-year period are $750,000 for the first year, $1.25 million for the second, and $2 million for each year thereafter. Once a positive production decision is made, Eurasian can request that Barrick arrange the junior’s share of the development costs at commercial rates.
Eurasian’s Sisorta property is the first to be defined as a designated project. It is high-sulphidation, volcanic-hosted gold system in north-central Turkey, inland from the Black Sea on the arid southern side of the Pontide Mountains.
The Turkish government drilled 10 core holes at Sisorta in the late 1990s. Highlights included 24.9 metres grading 2.54 grams gold per tonne in hole 3; 12.65 metres of 3.02 grams gold in hole 6; and 21.35 metres of 2.15 grams gold in hole 9. Eurasian has not independently confirmed the accuracy of these drill results but says they are “representative of the tenor and depth extent of the mineralization reported” and that they conform to industry-accepted standards of the mid-1990s.
Through its Turkish subsidiary, Eurasia Madencilik, Eurasian Minerals has acquired more than 1,657 sq. km of prospective ground in less than a year. In the process, it has become one of Turkey’s largest exploration land-holders, focusing on epithermal gold and copper-gold porphyry deposit types.
Barrick has also agreed to buy 1 million Eurasian units for $1.25 apiece. A unit consists of a Eurasian share and one warrant, with each warrant allowing the holder to buy another share for $2 within two years. After the financing closes, Barrick will own 5.27% of Eurasian and have the option to participate, pro rata, in any future financings.
Meanwhile in western Kyrgyzstan, Eurasian has retained Behre Dolbear & Co. (U.S.) to perform a scoping study of its Kuru Tegerek copper-gold deposit.
The consultants will reassess the viability of the Southern zone oxide mineralization, given current metal prices and recent advancements in mining and processing technologies.
The consulting firm will also review an updated oxide resource based on 123 core holes totalling 4,900 metres and drilled on a 25-metre grid by Hemmco-Kyrgyzstan in 2000-2001.
At the same time, Eurasian’s geologists will continue assessing the Kuru Tegerek licences. This work will entail sampling the western flank of the Southern zone mineralization that is open along strike, reopening Soviet underground workings, and mapping and sampling the Northwestern and Northeastern zones that host copper-gold mineralization identified by the Soviets from both underground workings and surface trenching.
Eurasian is evaluating many other potential exploration opportunities in the central Asian country, including Tiup in the east, Oital in the southwest and Kemin in the northeast.
The company’s field crews have so far collected 2,000 of a planned 4,000 stream-sediment samples as follow up to regional-scale targets delineated from Soviet-era exploration results. Samples are being processed in Vancouver.
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