Reunion Gold unveils settlement, ending Barrick dispute

Reunion Gold Corp. [RGD-TSXV] shares were active in heavy trading Wednesday after the company said it has settled a claim brought by Barrick Gold Corp. [ABX-TSX, NYSE] on a mutually acceptable basis.

“The company and Barrick have agreed that the strategic alliance entered into by them on February 3, 2019, has been terminated,’’ Reunion said in a press release. “The parties have no outstanding obligations under the alliance agreement, and there are no properties subject to the alliance agreement.’’ Reunion said a consent dismissal order will be entered in the Ontario Superior Court to dismiss the claim, leaving it to focus all its efforts on continued exploration and development of its 100%-owned Oko West project in Guyana.

Reunion shares advanced on the news, gaining 1.1% or $0.005 to 45 cents on volume of 3.7 million, making Reunion the volume leader on the TSX Venture Exchange. The shares trade in a 52-week range of 28.5 cents and 59 cents.

Back in February, 2023, Reunion was named as a party in a statement of claim issued by Barrick Gold in the Ontario Superior Court of Justice. Reunion said the claim related to the company’s termination of its strategic alliance agreement with Barrick dated February 3, 2019, as amended.

Reunion Gold is a leading gold explorer with a portfolio of projects in the Guiana Shield in South America. In 2019, the company formed a strategic alliance with Barrick to explore, develop and mine mineral properties in the Guiana Shield.

Under the deal, the two companies pledged to form a 50:50 alliance designed to cover certain mineral projects in Guyana, Suriname, French Guiana and the north and northeast regions of Brazil. Barrick committed to increase its stake in Reunion to 19.9% from 15%.

Reunion’s contribution to the alliance was the Waiamu, the Aremu, the Arawini, and the Oko projects, all of which are located in Guyana. In return, Barrick agreed to provide US$4.2 million to fund the initially included projects. This amount represented credit for the historical exploration and money already spent by Reunion. Subsequent funding was to be on a 50:50 basis.

In December, 2020, Reunion announced that the NW Extension project in Suriname would be included in the strategic alliance.

However, by notice of termination dated December 5, 2022, Reunion said it terminated the alliance agreement effective, February 3, 2023.

In its statement of claim, Reunion said Barrick alleged, among other things, that the alliance agreement should continue in perpetuity and that the company’s termination of the alliance agreement is invalid. Reunion went on to say that Barrick was seeking relief in the form of, among other things, declarations affirming its position, orders compelling the company to perform its obligations under the alliance agreement, related injunctive relief and damages.