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Barrick Gold Corp
Symbol C : ABX
Shares Issued 1,751,262,450
Close 2019-02-01 C$ 17.33
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Reunion, Barrick partner to explore the Guiana Shield

2019-02-04 08:16 ET - News Release

See News Release (C-RGD) Reunion Gold Corp

Mr. Rejean Gourde of Reunion reports

REUNION GOLD ANNOUNCES A STRATEGIC ALLIANCE WITH BARRICK GOLD CORPORATION TO EXPLORE, DEVELOP AND MINE MINERAL PROPERTIES IN THE GUIANA SHIELD; CONCURRENTLY, BARRICK AGREES TO INCREASE ITS INTEREST IN REUNION TO 19.9%

Reunion Gold Corp. and Barrick Gold Corp. have provided an update. The companies have: (i) executed a strategic alliance agreement (SAA) with Barrick Gold Corp. to form a 50:50 alliance to jointly explore for, develop and mine certain mineral projects in the Guiana Shield, including Guyana, Suriname, French Guiana and the north and northeast regions of Brazil; and (ii) signed a concurrent agreement to increase Barrick's interest in Reunion to 19.9 per cent through its participation in Reunion's previously announced private placement offering.

Alliance on Guiana Shield mineral properties

Reunion and Barrick have entered into the SAA to establish terms for the identification of mineral properties and mining projects (or options in respect thereof) that will be subject to the alliance, the governance of the alliance and the management of the mineral properties and mining projects that will be subject to the alliance.

Reunion will initially contribute to the alliance the Waiamu project, the Aremu project, the Arawini project and the Oko project, all located in Guyana. Barrick will initially finance an amount equal to $4.2-million (U.S.) on the initial included projects, as credit for historical exploration expenditures spent by Reunion, with subsequent financing to be on a 50:50 basis between Reunion and Barrick.

Subsequently, and as long as the alliance will be in effect, if Reunion acquires an interest or an option to acquire an interest in any mineral property in the subject area, it will present the new project to Barrick and Barrick will have 90 days to elect to include the new project in the alliance. If included, Barrick will finance the initial costs and expenditures for the project in an amount equal to Reunion's incurred costs on the project up to a maximum of $250,000 (U.S.).

Barrick can at any time designate an included project as a designated project. Following such designation, Barrick will sole finance the designated project until the completion of a feasibility study in respect of the project. Upon completion of a feasibility study, Barrick's interest in the designated project will increase to 70 per cent and Reunion will retain a 30-per-cent interest. If Barrick does not deliver a feasibility study on the designated project, the project returns to the alliance as an included project.

Reunion will manage all exploration projects within the alliance until such projects are defined as designated projects. Barrick will manage all designated projects.

Reunion's interest in the Dorlin, Haute Mana and Boulanger projects, all located in French Guiana, are initially not included in the alliance. However, Barrick retains a right of first refusal on these projects, and can in the future define any project, based on certain criteria, as a designated project and would then, at that time, pay to Reunion 50 per cent of all costs incurred by Reunion on such designated project to that date.

Following delivery of a feasibility study for a designated project, at Reunion's request, Barrick will finance or arrange capital for Reunion's share of any debt financing required to develop and construct a mine and related facilities on the designated project that Barrick has chosen to develop. Barrick will receive an additional 5-per-cent interest in the designated project for financing or arranging such capital.

Rejean Gourde, Reunion's president and chief executive officer, commented: "This alliance addresses the concerns faced by explorers worldwide. The combination of skills, knowledge, working together create the conditions necessary for exploration and development success. The Guiana Shield is one of the best remaining places in the world for large-scale gold discoveries. The alliance creates the opportunity to deploy skills and expertise effectively and efficiently. The Guiana Shield has been overlooked for a variety of historical reasons, including remoteness, lack of infrastructure, knowledge of how to conduct effective tropical exploration and an understanding of local conditions and laws. The alliance combines long-term local knowledge and record of success of the Reunion team together with the industry-leading skills and knowledge of Barrick. This combination focused on the Guiana Shield creates a greatly enhanced opportunity of success.

"The gold industry is in its infancy in Guyana, Suriname and French Guiana. However, the success of the Omai, Rosebel and Merian gold projects have made the government of each of these countries fully aware of the societal and economic benefits that well-regulated and efficient mining investment brings. In summary, you have one of the best geological environments in the world with political and social support and local acceptance for exploration and development which is being conducted by responsible companies in a professional manner."

In connection with the entering into of the alliance, Barrick will exercise its right under the investor rights agreement between Barrick and Reunion dated Dec. 1, 2017, to nominate one director to Reunion's board of directors.

The obligations to consummate the transactions contemplated by the SAA are subject to certain conditions and any required approvals.

Increased interest to 19.9 per cent

Concurrently with the signing of the SAA, Barrick has agreed to subscribe to such number of shares to increase its interest in Reunion from 15 per cent to 19.9 per cent. Assuming that the previously announced private placement of up to $15-million is fully subscribed, Barrick will purchase 35.7 million shares for a total value of $5,355,000.

The company is planning to close the private placement on or about Feb. 6, 2019, subject to certain conditions including receipt of TSX Venture Exchange acceptance of the private placement.

About Reunion Gold Corp.

Reunion Gold is a Canadian exploration company focused on acquiring, exploring and developing gold projects in the Guiana Shield in South America. The company has entered into agreements to acquire an interest in the Dorlin, Boulanger and Haute Mana gold projects in French Guiana and in the Waiamu, Aremu and Arawini gold projects in Guyana.

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