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Troy Resources (ASX:TRY) pulls out the big gun on Karouni Project; forms JV with Barrick Gold

Summary

  • Troy signed an Earn-in Agreement with Barrick Gold for exploration and development of exploration tenements at the Karouni Gold Project.
  • Barrick to form JV with Troy with initial 51% interest, and with an option to earn up to 80% interest in the exploration tenement project.
  • Troy to issue fresh shares to Barrick @AU$0.041 to raise US$1.2 million to support its Smarts Underground development works.
  • The shares of Troy Resources jumped 10% on the news of JV with Barrick Gold.

South America-focussed gold miner Troy Resources Limited (ASX:TRY) has entered into an Earn-in Agreement with Barrick Gold Corporation (NYSE:GOLD), a major gold and copper producer with a global presence.

Under the terms of the Earn-in Agreement, exploration tenements (Project Tenements) in the Karouni Gold Project will be explored and developed jointly by both the companies. Barrick will also subscribe to 4.9% of the outstanding share capital, raising ~US$1.2million.

Latest update: Troy Resources (ASX:TRY) gets approval for Smarts Underground, shares soar ~15%

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Exploration tenements under Earn-in Agreement

The Earn-in Agreement will include only exploration tenements in the project. Troy holds 100% interest in the Karouni Gold Project. In the last 7-8 months, the Company has acquired substantial tenement packages to increase its gold footprint in the country. The latest addition to the asset portfolio of the Company is Potaro target.

The Potaro target lies along the crustal shear zone – Makaba-Kuribrong Shear Zone. The shear zone has unique reputation of holding multi-million ounces of gold deposits in the Guiana Shield. Another project tenement included in the Earn-in Agreement is Kuribrong target. The target lies along the northwest side of the shear zone. Mirror and Mirror SE targets will also form part of the agreement.

Recent update: Troy Resources (ASX:TRY) to Develop Smarts Underground as the Primary Source of Production

Troy tenement package in Guyana (Image source: Company update, 1 July 2021)

The area marked yellow on the map will be part of the Earn-in Agreement. Troy will continue to control 100% interest in the area marked grey on the map.

The Earn-in Agreement is for exploration tenement only and does not include the areas under the Karouniminesite and immediate mine areas.

Good read: Troy follows aggressive exploration approach at Karouni amid gold bull run

Terms of the Earn-in Agreement

  • Barrick gains sole and exclusive right to earn 51% undivided interest in the Project Tenements (Earn-in Right).
  • Under the terms of Earn-in Right, Barrick must fund 100% of the operational activities on the Project Tenements and deliver the Pre-Feasibility Study.
  • A joint venture will be formed after exercising the Earn-in Right, with Troy holding 49%, while Barrick 51% in the Project Tenements.
  • Barrick will have a choice to sole fund the JV until completion of the Feasibility Study and earn an extra 19% interest in the JV.
  • In case of any decision leading to the development and construction of a mine, Troy can ask Barrick to fund its share of financing in lieu of additional 10% ownership of the JV.
  • Barrick will be the operator of the project during the earn-in period.
  • Barrick will also receive 5% of the total expenditures incurred as a management fee.

Troy to raise US$1.2 million through share capital

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Troy will receive US$1.2 million from Barrick for development activities on the Karouni Gold Project, including the development of the Smarts Underground deposit. Troy will issue 39,033,254 shares to Barrick at an issue price of AU$0.041 per share (US$0.0308/share) to cover the US$1.2 million.

Copyright © 2021 Kalkine Media

The newly issued shares represent approximately 4.9% of the Company’s expanded share capital.

Read here: Troy Resources (ASX:TRY) to crank up mining operations at Smarts Underground

Mr Ken Nilsson, Managing Director of Troy Resources, welcomed Barrick as a business partner and shareholder and commented that the ground position at Karouni was highly prospective for gold mineralisation. He pointed out that due to financial circumstances, Troy was unable to explore to the extent that was rightfully warranted.

“Of our current ground position, none is considered to be more prospective than Potaro. Having identified this opportunity approximately two years ago, we were very pleased to have recently been able to aggregate a sizeable tenement package over this area. Situated under significant sand cover, exploration of Potaro and other targets will be significantly enhanced by the involvement of Barrick and its exploration tea”

Mr Nilsson further added.

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