Atac Resources Ltd. [ATC-TSXV] said Barrick Gold Corp. [ABX-TSX, ABX-NYSE] has dropped an option to earn an interest in the central portion of the junior’s Rackla gold project in the Canadian Yukon. Under an agreement announced in April 2017, Barrick agreed to earn up to a 70% interest in the Orion project. Terms of the deal included a potential total investment byBarrick of approximately $63.3 million, including an $8.3 million private placement and a two-staged, $55 million earn in option on the Orion Project.
Orion is one of three separate projects located on Atac’s 100%-owned Rackla Property. It covers 780 km2 and is the only project that was subject to the Barrick earn-in deal. The other two are the Osiris and the Rau.
It has been widely reported that companies like Barrick Gold have been attracted to the region by the geological similarities between parts of the Yukon, and the fabled Carlin gold trend in Nevada.
At the time the deal was announced, Atac President and CEO Graham Downs said he viewed the earn-in agreement and related private placement with the world’s largest gold producer as a significant endorsement of the Rackla gold property.
In a December 12, 2018 news release announcing the termination of the Barrick earn-in option, Downs said the project remains a highly-prospective mineral asset in a top-tier jurisdiction. “With over $10million in working capital, ATAC remains well positioned to continue exploration in 2019 across the Rackla property, including the Orion Project.”
Published reports have said Atac may be one of the first victims of Barrick’s more conservative investment strategy following a decision to merge with Randgold Resources Ltd. [GOLD-NASDAQ, LSE] in a deal worth $18.3 billion.
However, it is worth noting that Orion is basically grass roots exploration and remains the least advanced of the projects at the Rackla site.
An inferred resource of 1.68 million ounces (grading 4.23 g/t gold) has already been outlined on the Osiris Project.
The Tiger deposit, which is located on the Rau Project, is thought to contain a measured and indicated oxide and sulphide resource of 485,700 ounces of gold.
Barrick remains Atac’s largest shareholder with an18.9 % interest after spending $10 million to complete 7,500 metres of drilling in 16 holes over a 15 km2 area.
“This year’s drill campaign successfully identified the principal regional-scale gold-bearing structure at Orion,” said Ed Cope, Atac’s technical advisor.
“The fact that high-grade gold was intersected in all four step-out holes, across a very large area along the Anubis Fault, is a strong testament to the strength of the underlying hydrothermal system,” he said.
Meanwhile, after a sharp in response to the announcement on December 12, 2018, Atac recovered some ground on Thursday. The stock was up0.99% or $0.0025 to 25.5 cents.