Somerset Minerals (ASX:SMM) has entered into an agreement with Barrick Gold (NYSE:GOLD) for the sale of the Valle del Tigre mineral concessions in southeast Ecuador.
Under the agreement, Barrick will pay Somerset US$320,194 ($474,379) for the project, subject to completion of the transaction occurring.
Once completed, which is scheduled for the December quarter this year, Barrick will grant Somerset a 1.5% net smelter royalty over the project area.
The royalty agreement will contain a buy-down provision, allowing Barrick to reduce the royalty to 0.5% for a fixed price of US$1 million, and a right of first refusal in favour of Barrick on any transfer or assignment of the royalty or any rights under the agreement by the royalty holder.
Managing Director Chris Hansen says this transaction brings value and allows the company to focus on its newly acquired Prescott Base Metal Project in Nunavut, Canada.
“With exploration activities already underway at Prescott, we eagerly anticipate the completion of the geophysical survey in July, followed by a targeted geochemical program in early August,” he says.
“We believe this strategic shift will enhance our focus, and we are incredibly excited to see the potential that the Prescott Project can deliver.”
The Prescott Project, acquired in mid-June, is considered prospective for copper and base metals and covers a 607km2 area.
Somerset Minerals, previously known as Tempus Resources, is a diversified mineral explorer with assets in Canada and Ecuador.
Write to Aaliyah Rogan at Mining.com.au
Images: Unsplash
