Opawica, Barrick revise Argentine deal

A 1999 agreement, under which Barrick Gold (ABX-T) was earning a 70% interest in properties held by Opawica Explorations (OPW-T) in Argentina, has been revised.

As a result, Opawica is now freed from having to pay US$100,000 in exploration and property payments. Barrick will pick up US$125,000 in property payments, maintenance and exploration costs, and take down a US$300,000 private placement in Opawica (just over a million shares at 40), giving it a 17% interest in the junior. Under the earlier agreement, Barrick has already acquired a million shares of Opawica.

A set of 1 million warrants on Opawica shares, which Barrick could have exercised at $1.25, will be cancelled, and Opawica is waiving an earlier provision of the agreement that would have obliged Barrick to reimburse it for 250% of its property payment costs.

Barrick’s expenditures of US$125,000 over the next two years take the project to a stage where the two companies form a joint venture funded 70% by Barrick and 30% by Opawica. The revised deal will require approval from securities regulators.

Opawica’s properties are in the Valle del Cura area of the Argentine Andes. They include a 7-km belt of alteration zones in the Despoblados area, about 17 km southeast of the Veladero gold-silver deposit, currently being explored by Homestake Mining (HM-N) in a 60-40 joint venture with Barrick.