Barrick increases stake in Midas Gold

Barrick Gold Corp. [ABX-TSX, NYSE] has agreed to buy more shares in  Midas Gold Inc. [MAX-TSX, MDRPF-OTC], a move that will help to advance the company’s Stibnite Gold Project in Idaho.

On Tuesday, Barrick said it will acquire 7.3 million common shares of Midas as part of the bought deal public offering announced Monday by Midas. It consists of 33.2 million shares priced at 60 cents per share. Barrick currently owns 46.5 million common shares of Midas, or 19.6% of the outstanding shares.

Once the offering closes, likely by June 19, 2019, Barrick’s interest in Midas will increase to 19.9%.

Barrick is buying the additional shares of Midas at 60 cents a share, making the investment worth $4.4 million.

On Tuesday, Midas shares eased 8.8% or $0.06 to 62 cents on volume of 589,717. The 52-week range is 56 cents and $1.11.

Paulson & Co Inc. is also participating in the offering in order to maintain its 29% interest in Midas.

Proceeds will help to advance Midas Gold’s ongoing efforts to permit the Stibnite Gold Project, so that the company can build and operate a mining operation that addresses legacy environmental impacts and generates economic benefits to the local community.

The company is in the midst of advancing Stibnite Gold through completion of a feasibility study and permitting for site restoration and redevelopment.

In a press release on April 2, 2019, the company said it has been advised that the Unites States Forest Service anticipates issuing a draft environmental impact statement for public comment late in the fourth quarter of this year. The final environmental impact statement and draft record of decision is expected by the third quarter of 2020.

“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,” Midas President and CEO Stephen Quin has said.

The project is located at Stibnite in Valley County, approximately 200 kilometres 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 dore 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 former 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.