Barrick Gold makes strategic investment in Midas Gold

Barrick Gold Corp. [ABX-TSX, NYSE] has agreed to make a US$38 million strategic investment in Midas Gold Inc. [MAX-TSX; MDRPF-OTC] to advance the company’s Stibnite Gold Project in Idaho.

The announcement sent Midas Gold shares up 10.31% or $0.10 to $1.07 in early trading on Wednesday. The 52-week range for the stock is $1.08 and 55 cents.

On Wednesday May 9, Midas said it has entered into an agreement whereby Barrick will purchase 46.5 million common shares of Midas in a non-brokered private placement at $1.06 per share, for gross proceeds of US$38,065,907. As a result, Barrick will end up owning a 19.9% stake in Midas.

Barrick’s investment supports Midas Gold’s continued efforts to permit the Stibnite Gold Project, so that it can build and operate a world class mining operation that addresses legacy environmental impacts and generates economic benefits to the local community, Midas said in a press release.

“Midas Gold is in the midst of advancing the Stibnite Gold Project through completion of a feasibility study and permitting for site restoration and redevelopment,” said Midas President and CEO Stephen Quin.

“With our detailed plan for site restoration and protection of the environment, a large, long-life and low cost operation, and a comprehensive proposal for closure and reclamation of the site, Midas Gold is positioned  to complete the critical milestones of feasibility study and permitting,” he said.

The project is located at Stibnite in Valley County, approximately 200 km by road northeast of Boise, Idaho. Midas has said it believes the site contains over 6.5 million ounces of gold and over 180 million pounds of antimony. Antimony is an important strategic metal for the United States defense, aerospace and energy industries.

According to a December 2014 prefeasibility study and related technical report, the Stibnite Gold Project has the potential to clean up an existing brownfield site, one that has been extensively mined for more than 80 years, and which could become one of the largest gold producers in the United States.

The study envisages the removal and reprocessing of historic gold-silver-antimony tailings and mining the Yellow Pine, Hangar Flats, and West End gold-silver-antimony deposits using conventional open pit methods, conventional processing methods to extract gold, silver, and antimony, and on-site production of gold and silver doré and an antimony concentrate.

The Stibnite Gold Project, as contemplated in the Pre-Feasibility Study, contains four deposits, including historic tailings with combined indicated mineral reserves of 104.5 million tonnes, grading 1.63 g/t gold, 2.65 g/t silver, and 0.07% stibnite. The aggregate indicated mineral resources contain 5.46 million ounces of gold, 8.90 million ounces of silver and 155.2 million pounds of stibnite.

It is expected that if developed, the Stibine Gold Project will create more than 1,000 well-paying jobs.

“Midas Gold’s Stibnite Gold Project in Idaho offers a compelling investment proposition with low geopolitical risk, potential for production of over 300,000 ounces of gold per year at competitive operating costs, and exploration upside,” said Barrick President Kelvin Dushnisky. “We are also impressed with the emphasis that Midas Gold has placed on building partnerships with local communities and share their strong commitment to environmental stewardship,” he said.