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Latin Metals and Barrick Gold Corporation Enter into Earn-In Agreement for Exploration Projects, Santa Cruz Province, Argentina

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Latin Metals and Barrick Gold Corporation Enter into Earn-In Agreement for Exploration Projects, Santa Cruz Province, Argentina







Latin Metals Inc. (TSX-V: LMS) (OTCQB: LMSQF) announces that it has entered into an earn-in agreement with a wholly-owned subsidiary of Barrick Gold Corporation (TSX: ABX) (NYSE: GOLD). Under the terms of the Earn-In Agreement, Barrick has the right to acquire up to an 85% interest in the Company’s Cerro Bayo, Cerro Bayo Sur and La Flora properties  located in Santa Cruz Province, Argentina (Figure 1). Barrick’s earn-in right consists of an initial option to acquire a 70% interest in the Properties and a second option to acquire an additional 15% (aggregate 85%) interest.


The Properties are currently subject to an underlying option agreement dated February 7, 2019, as amended (see news release dated February 11, 2019), pursuant to which Latin Metals has the right to acquire an ultimate 100% interest in the Properties.


To exercise the First Option and earn a 70% interest by the seventh anniversary of the Effective Date (defined below) of the Earn-In Agreement, Barrick must:

  1. Make cash payments totaling US$2,321,793 pursuant to the Underlying Option Agreement;
  2. Make cash payments to Latin Metals totaling US$750,000 (inclusive of $150,000 on the Effective Date);
  3. Incur exploration expenditures with respect to the Properties totaling US$5,000,000, of which US$1,000,000 is a binding commitment (work or cash in lieu) to be spent before the second anniversary of the Effective Date; and
  4. Prepare and deliver to Latin Metals a Preliminary Economic Assessment prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects.


To exercise the Second Option and earn an additional 15% interest by the ninth anniversary, Barrick must:

  1. Make additional cash payments to Latin Metals totaling US$425,000 (aggregate US$1,175,000); and
  2. Sole fund all costs and deliver to Latin Metals a Prefeasibility Study prepared in accordance with NI 43-101.


The binding nature of Barrick’s expenditure commitment does not become effective until the parties have entered into an agreement with the underlying property owner to acknowledge Barrick’s rights under the Earn-In Agreement and authorize Barrick to conduct operation on the properties. In the event that such agreement is not reached within 60 days of executing the Earn-In Agreement, Barrick may terminate the Earn-In Agreement immediately upon notice to Latin Metals.


Barrick may at any time during the term of the Earn-In Agreement accelerate the timing for payment of any or all cash payments to Latin Metals and the underlying owner of the Properties, delivery of technical studies, and incurring exploration expenditures.


“Barrick is a good partner who bring considerable technical and financial capability to the project” said Keith Henderson, President and CEO of Latin Metals. “Assuming that the Earn-In Agreement runs to full term, Barrick’s investment of around US$8.5 million will include payments to the underlying vendor, payments directly to Latin Metals and funding of work on the ground; all of which will help to limit dilution to Latin Metals’ shareholders.” Mr. Henderson added: “The Earn-In Agreement is consistent with the Company’s prospect generator model, and the work contemplated, if successful, would advance the projects considerably, while Latin Metals will retain a minority interest.”


Figure 1: Location of the Cerro Bayo, Cerro Bayo Sur, and La Flora properties, together
with Latin Metals’ additional property interests in Santa Cruz.


During the term of the First Option, Barrick will have the exclusive right to explore and conduct operations on the Properties and Latin Metals will be responsible for maintaining the Properties valid and in good standing.


Upon the exercise of the First Option, Latin Metals and Barrick will form a joint venture for the continued exploration, development and, if warranted, mining of the Properties. The initial participating interests of the parties in the JV will be Barrick – 70% and Latin Metals – 30%. If Barrick exercises the Second Option, the interests of the participants will be Barrick – 85% and Latin Metals – 15%. The party with the majority participating interest will be the operator of the Properties. Funding of the JV’s operations will be based on each party’s prevailing proportionate participating interest. Dilution of a party’s participating interest will apply in the case of funding shortfalls by either party. If a party’s participating interest in the JV falls to below 5%, it will be converted into a 1.5% net smelter returns royalty. The transfer of the Dilution Royalty shall be subject to a right of first refusal in favour of the non-diluting party.


About Latin Metals


Latin Metals is a mineral exploration company acquiring a diversified portfolio of assets in South America. The Company operates with a Prospect Generator model focusing on the acquisition of prospective exploration properties at minimum cost, completing initial evaluation through cost-effective exploration to establish drill targets, and ultimately securing joint venture partners to fund drilling and advanced exploration. Shareholders gain exposure to the upside of a significant discovery without the dilution associated with funding the highest-risk drill-based exploration.


Qualified Person


Keith J. Henderson, P.Geo., is the Company’s qualified person as defined by NI 43-101 and has reviewed the scientific and technical information that forms the basis for portions of this news release. He has approved the technical disclosure herein. Mr. Henderson is not independent of the Company, as he is an employee of the Company and holds securities of the Company.





Posted February 7, 2022

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