YWRLF - Dixie Gold Inc. Announces Agreement with Barrick Gold
(TheNewswire)
Vancouver, British Columbia - TheNewswire - November 3, 2021 - Dixie Gold Inc. (TSX V :DG) (“ DixieGold ” or the “ Corporation” ) ispleased to announce that it has executed a definitive agreement with asubsidiary of Barrick Gold Corp. (“ Barrick Gold ”)whereby Dixie Gold has granted the right to Barrick Gold, as operator,to earn-in on its Red Lake project (the “ Red Lake Gold Project ”) situated near Red Lake, Ontario, Canada (the“ Earn-InAgreement ”).
“ Today’sannouncement is a milestone event for Dixie Gold and its Red Lake GoldProject. We have been focused and patient in advancing our Red LakeGold Project since its acquisition less than 2 years ago. We believeour news today to platform-in Barrick Gold as the project partnerspeaks to the tier-one potential of the asset and to our strategy.Barrick Gold is one of the world’s largest gold producers and theirtechnical team represents the pinnacle of gold discoveryexpertise.
Our agreement with Barrick Gold notonly sets the stage for potentially millions of dollars of explorationwork, but it would also culminate in the definition of a significant43-101 gold resource prior to any project interest being assigned. Asfurther outlined in this news release, the agreement reached withBarrick Gold also conditionally provides that Dixie Gold may requestthat Barrick Gold assist with Dixie Gold’s share of potential mineconstruction costs, including the effective pass-through of BarrickGold’s cost of capital, a tremendous advantage for a juniorexploration entity such as Dixie Gold.
This unique and collaborativeagreement between the teams at Barrick Gold and Dixie Gold sets thestage for significant project-advancement while positioning ourcompany to sustain its compelling investor-focused sharestructure ,” stated Ryan Kalt, Chairman &CEO of Dixie Gold.
Through its Red Lake Gold Project, Dixie Gold holds alarge district-scale gold exploration project covering approx. 25,269ha of mining rights. The project is situated immediately adjacent andcontiguous to the Dixie Project being advanced by neighbouringexploration junior Great Bear Resources Ltd.
Figure One: Dixie Gold Inc. – RedLake Project Map
Details on the Earn-InAgreement
The Earn-In Agreement as between Dixie Gold and BarrickGold is subject to a variety of industry standard earn-in provisions,with key material terms being that:
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1) Barrick Gold may earn a 70%interest in the Red Lake Gold Project by incurring, in full, anaggregate of at least $4,000,000 of exploration expenditures within48 months of the Earn-In Agreement (of which at least $500,000 is aguaranteed expenditure in the first twelve months) (the“ ExpenditurePeriod ”);
and
deliver a 43-101 compliant technical report in respectof Dixie Gold’s Red Lake Gold Project that establishes a mineralresource of at least half a million ounces of gold (or gold-equivalentounces) (the “ 500,000 OunceGold Resource ”) as prepared in accordance withthe requirements of National Instrument 43-101and published within a further 12-months from the ExpenditurePeriod.
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2) Subject to a successfulearn-in by Barrick Gold, Dixie Gold and Barrick Gold shall establish ajoint-venture corporation (the “ JV Corp. ”), to beheld on the basis of 30% as to Dixie Gold and 70% as to BarrickGold.
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3) Dixie Gold may, at its solediscretionary election, avail itself of certain development fundingoptions, including whereby upon approval of a feasibility study withinthe JV Corp., Dixie Gold may request that Barrick Gold provide or otherwise successfully arrange third-partyfinancing of Dixie Gold’s portion of any debt financing required forthe development and construction of an operating mine (the“ Mine FinancingMechanism ”), in consideration for a further10% allocation out of Dixie Gold’s 30% allocation in the JV Corp.Among other provisions, the Mine Financing Mechanism outlines thatfunding from Barrick Gold shall be facilitated at an interest rateequal to Barrick Gold’s cost of capital, with 80% of initial freecash flow related to the Dixie Gold interest being allocated torepayment.
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4) If either Dixie Gold orBarrick Gold’s interest in the JV Corp. declines below a 10%threshold, then that party’s interest shall, as applicable, convertto a 1% NSR.
Additional announcements related to forwardexploration-plans and results as associated with the Red Lake GoldProject will be issued by the parties in normal course.
Qualified person
Harrison Cookenboo Ph.D., P.Geo. and a QP by thestandards of Canadian National Instrument 43-101, has reviewed thescientific and technical information in this news release and hasapproved the disclosure herein.
About Dixie GoldInc.
Dixie Gold Inc. (TSXV: DG) is a publicly-tradedexploration company involved in a diverse portfolio of high-impactexploration projects in Canada.
The Company has 25,737,188 common shares issued, withno warrants outstanding.
For more information, please visit www.dixiegold.ca
Signed,
Ryan Kalt
Chief Executive Officer
Dixie Gold Inc.
Forward-Looking Statements
This news release contains forward-looking statements.Forward-looking statements address future events and conditions andtherefore, involve inherent risks and uncertainties. Actual resultsmay differ materially from those currently expected or forecast insuch statements.
Neither the TSXVenture Exchange nor its Regulation Services Provider (as that term isdefined in the policies of the TSX Venture Exchange) acceptsresponsibility for the adequacy or accuracy of thisrelease.
Contact Info:
Ryan Kalt
Chief Executive Officer
Dixie Gold Inc.
E. info@dixiegold.ca
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