Coppermoly and Barrick to form JV

THE BOURSE WHISPERER: Global gold producer Barrick Gold has notified Coppermoly that it has met the $20 million expenditure commitment under the farm-in agreement on Coppermoly’s Simuku, Nakru and Talelumas tenements on New Britain Island, located off the coast of Papua New Guinea.

 

Location of Coppermoly projects on the Kulu Awit copper belt. Source: Company announcement

 

By meeting the expenditure commitment Barrick has now earned a 72 per cent stake in each of the tenements.

“In accordance with the farm-in agreement a joint venture for the further exploration and evaluation and, if warranted, the development, of the tenements will now be formed,” Coppermoly managing director Peter Swiridiuk said in the company’s announcement to the Australian Securities Exchange.

“Coppermoly does not have to contribute funds until a feasibility study has been finalised.”

Under the terms of its agreement with Barrick, Coppermoly will retain a 28 per cent interest in the three tenements.

The company said its cash contribution up to the completion of a feasibility study will be delayed until the commencement of production, and will be repaid from Coppermoly’s share of any future production revenue.

The copper and gold projects located within the tenements are within a four hour drive from existing infrastructure.

This includes a deep water port at the provincial capital of Kimbe.

Coppermoly considers the proximity of this infrastructure enhances the potential for any future development.

“The joint venture will provide significant upside to Coppermoly shareholders through the retention of a substantial interest in these advanced projects,” Swiridiuk said.

“Coppermoly also expects to be able to undertake exploration in its own right on the new areas that Coppermoly currently has under application on New Britain Island as tenements over those areas are granted during 2012.”