An agreement has been reached whereby shares of Chesbar Resources (ME) will be privately placed with Barrick Gold (TSE), and the proceeds used to fund exploration of Chesbar’s gold properties in eastern Venezuela.
Barrick will buy Chesbar shares at $1.50 each, to a value of $2 million. The senior company will then have the option of spending $3 million more to acquire shares at $1.50 each or at the market price, whichever is greater. Chesbar will continue to manage exploration on the properties, and Barrick will have the right to approve exploration budgets.
Once the $5 million has been spent, Barrick can elect to provide a feasibility study to earn a 60% interest in the Anacoco properties, and can also buy an additional 5% interest for $5 million.
Barrick has undertaken to arrange production financing if the project, situated in the Anacoco area, is deemed feasible.