Japan Gold Corp (CVE:JG) (OTCMKTS:JGLDF) has struck an extensive tie-up with mining behemoth Barrick Gold Corp (NYSE:GOLD) (TSE:ABX) to jointly explore, develop and mine properties in the east Asian country.
The partnership spans 28 out of the firm's 30 current projects and Barrick will sole fund a two-year initial evaluation of each project and potentially a three-year second phase if they meet the mining titan's criteria.
Shares in Japan Gold surged nearly 19% in Toronto to stand at C$0.38 each.
There is a minimum total spend of US$3 million for each of the first two years of the Barrick alliance; and US$4 million for each of the third, fourth and fifth years, subject to some exceptions.
Barrick's CEO Mark Bristow said the junior had "assembled an impressive portfolio of exploration tenements within the renowned epithermal gold provinces of Japan".
"We look forward to advancing our partnership by combining Barrick's technical and financial resources with Japan Gold's first mover advantage, to deliver new world class gold discoveries."
Japan Gold's CEO John Proust added: "Every great new frontier starts with geology. Japan is an ideal, underexplored, setting to make new large low sulphidation epithermal gold discoveries, building on the great success of the Sumitomo Metal Mining Co. Ltd.'s Hishikari Gold Mine. Barrick's global experience of operating 15 mines on 4 continents combined with Japan Gold's in-country knowledge and operational expertise make an ideal partnership to advance the gold mining industry in Japan."
The alliance does not include the firm's Ikutahara project on the island of Hokkaido and the Ohra-Takamine project on the island of Kyushu and Japan Gold will continue to advance these two projects independently.
Barrick may designate certain projects during the evaluation phases, when Barrick can then choose to sole fund a pre-feasibility study (PFS). Upon completion of a PFS, Barrick will earn a 51% interest. It may continue to sole fund such projects through to a bankable feasibility study (BFS). Barrick's interest in the designated project at the completion of the BFS will increase to 75%.
Where Barrick has elected to sole fund through to a BFS, Japan Gold will be fully carried through completion of the feasibility and retain a 25% interest in the project.
New gold projects acquired by Japan Gold may be included in the alliance, at Barrick's choosing.
Six new projects
Also in today's statement, and as part of the Barrick alliance, Japan Gold revealed it had acquired six new projects in the northern part of the epithermal gold province on Kyushu island and now holds a dominant position in the district.
More than 11 million ounces of gold have been produced from low-sulphidation epithermal deposits within the province, the firm told investors.
The six new projects include: Kushikino-Iriki; OT-Yaeyama Extension; Mizobe-Onoyama; Mizobe 1st Extension; Onoyama-Yamagano Extension; and the Tobaru-Fuke Extension and comprise 47,853 hectares.
Japan Gold now holds priority over 94,402 hectares comprising 15 projects in southern Kyushu and a total of 30 projects (176,370 hectares) across the three main Islands of Japan, it said.
The firm now has priority over these areas and authorization to commence surface exploration.
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