Dominican Explorer Doubles Barrick Deal to $22M Ahead of 2025 Drilling

• Precipitate Gold has renegotiated their agreement with Barrick Gold, increasing the investment from $10M to $22M with an extended timeline to 2030, with Barrick having spent $7M so far.
• The company has strategic land holdings surrounding Barrick's Tier 1 Pueblo Viejo mine in the Dominican Republic, as well as 100% owned exploration projects.
• Recent positive developments in the Dominican Republic include a regulatory pathway for Gold Quest and Unigold to advance their mining projects through environmental studies.
• Precipitate Gold has preserved cash (~$5M from a previous sale to Barrick) during uncertain times and is now preparing for new drilling programs in 2025.
• The Dominican Republic government is showing increased support for mining, with ministry officials actively engaging with mining companies at industry events to promote investment.

Precipitate Gold Corporation, a Dominican Republic-focused exploration company, has recently renegotiated its earn-in agreement with Barrick Gold, significantly increasing the potential investment in their joint venture. According to Jeffrey Wilson, President and CEO of Precipitate Gold, the original agreement established in 2020 required Barrick to spend $10 million over six years and produce a pre-feasibility study. The revised terms now call for a $22 million expenditure by Barrick to earn a 70% interest, with the timeline extended to 2030.

"When we initially entered into the earn-in agreement with Barrick in 2020, the terms of the agreement were that they would spend $10 million over 6 years and produce a pre-feasibility study. We've adjusted that now so instead of 10 million, it's a $22 million spend by Barrick to earn 70% and we've pushed back the date on that to 2030.”

This renegotiation provides Precipitate with increased exploration investment while maintaining their carried interest position. To date, Barrick has spent approximately $7 million on the project, meeting their annual requirements. While initial progress was slowed by COVID protocols and permitting challenges, activity has accelerated recently.

Strategic Land Position Near Tier 1 Asset

The appeal of Precipitate's property to Barrick lies in its strategic location surrounding Barrick's Pueblo Viejo operation, a Tier 1 gold asset in the Dominican Republic. The land package borders this major mining operation on three sides, providing Barrick with expansion potential for one of their flagship properties.

Wilson notes that Barrick's interest goes beyond simple exploration: 

"This is not just sort of a standalone opportunity somewhere in the middle of nowhere, it's very strategic as well. They would love nothing more than to increase their resource there and their throughput. They're in the process of doing a tailings expansion to increase the size of their current operations."

The structure of the agreement protects Precipitate's interests, as it's an "all or nothing" deal. If Barrick decides to discontinue exploration, Precipitate regains 100% ownership of the property, with contractual protections against future competition. Should the project advance to the 70/30 joint venture stage, Precipitate maintains a carried interest, meaning they are not required to contribute financially to development costs.

Improving Regulatory Environment in Dominican Republic

A significant development for mining in the Dominican Republic involves recent regulatory changes affecting GoldQuest's Romero project, which neighbors Precipitate's wholly-owned Ponton property. Previously, GoldQuest had been unable to advance their 3-4 million ounce gold equivalent deposit through permitting due to a requirement for presidential approval of mining licenses.

The regulatory process has been modified to allow companies to complete environmental impact studies and feasibility studies before final licensing decisions, creating a clearer pathway to development. This change has positively affected not only GoldQuest but also Unigold, another exploration company in the region, and has boosted investor confidence in the jurisdiction.

The improved regulatory outlook has had direct implications for Precipitate's strategy. The company had been cautious with expenditures on their 100%-owned projects due to uncertainty about the development pathway. With increasing clarity on the regulatory front, Precipitate is now positioning to accelerate exploration activities.

Financial Position and Exploration Strategy

Precipitate Gold finds itself in a relatively strong financial position compared to many junior explorers. The company received a $5 million cash payment from Barrick for the sale of some ground, strengthening their treasury without share dilution. Rather than rushing to deploy this capital during uncertain times, the company adopted a patient approach.

"We did look at a lot of different things, we did site visits on a lot of different projects in a lot of different parts of the world. In the end, we didn't really ever land on something that we thought that the terms were right and that it was in the best interest of our shareholders."

This conservative capital management strategy has positioned Precipitate to fund upcoming exploration programs without immediate financing needs. The company co-owns drilling equipment with GoldQuest, acquired from a bankrupt contractor at a significant discount, which will help reduce exploration costs.

Interview with CEO Jeffrey R. Wilson

2025 Exploration Plans

Despite the appearance of limited activity during the regulatory uncertainty, Precipitate has continued low-level groundwork, including prospecting and sampling that identified new target areas within their properties. Some targets have been expanded through follow-up work and trenching, creating a pipeline of drilling prospects.

The company now faces decisions about prioritizing drill targets for 2025. Some historical targets already have drilling permits in place, while newly identified zones require additional permitting. Management is evaluating whether to begin drilling immediately on permitted areas or wait for approvals on potentially more promising new targets.

Geophysical surveys, particularly ground IP (Induced Polarization), will play a key role in refining drill targets. The company plans to extend existing geophysical grids where anomalies remain open and conduct more detailed infill surveys to better define anomalies before drilling.

Wilson indicated that initial drilling would likely be measured rather than aggressive, to preserve financial flexibility: 

"I don't know that we would go in and do a 10 or 20,000 meter drill program right out of the gate here. I think what we'd want to do is prioritize, pick our best targets, test those targets."

Government Support for Mining Development

A notable shift in the Dominican Republic has been the increased engagement of government officials with the mining sector. The recently appointed Minister of Energy and Mines, along with other government representatives, has been actively participating in industry events and making themselves available to mining companies and investors.

This marks a significant change from previous years, when government engagement was more limited. The current administration, now in its second term, has adopted a more pro-business, pro-foreign investment stance, recognizing the need to diversify the economy beyond tourism.

Mining currently contributes approximately 43% to the Dominican Republic's economy, primarily from Barrick's Pueblo Viejo operation. However, with production at Pueblo Viejo gradually diminishing, the government recognizes the need to develop new mines to maintain this economic contribution.

The government's increased engagement appears driven by economic priorities rather than short-term political calculations, suggesting a more sustainable improvement in the mining investment climate. This support extends beyond the Ministry of Energy and Mines to include the Environment Ministry, which is responsible for issuing drilling permits.

The Investment Thesis for Precipitate Gold

• Strategic Land Position: Holds property surrounding Barrick Gold's Tier 1 Pueblo Viejo mine, creating significant strategic value beyond typical exploration potential.
• Strong Partnership: $22M earn-in agreement with Barrick Gold provides significant non-dilutive funding for one project while maintaining a 30% carried interest if successful.
• Multiple Projects: Beyond the Barrick JV, maintains 100%-owned exploration projects with multiple drill targets being developed.
• Solid Treasury: Approximately $5M in the bank from previous property sales to Barrick, providing runway for exploration without immediate financing needs.
• Cost Advantages: Co-ownership of drilling equipment reduces exploration costs significantly compared to industry standard contractor rates.
• Improving Jurisdiction: Recent regulatory changes in the Dominican Republic have created clearer pathways from discovery to development.
• Government Support: Increased government engagement with the mining sector and recognition of mining's importance to economic development.
• Exploration Momentum: New targets identified through recent fieldwork, with drilling planned for 2025 to test priority targets.

Macro Thematic Analysis

The Dominican Republic represents an emerging gold mining jurisdiction that is reaching an important inflection point. The country hosts world-class gold deposits, including Barrick Gold's Pueblo Viejo operation, which ranks among the largest gold mines globally. However, until recently, regulatory uncertainty has constrained development of new mining projects despite the demonstrated geological potential.

Recent regulatory changes have created a more transparent pathway for mining development, specifically addressing a procedural bottleneck that had stalled Gold Quest's Romero project and Unigold's Neita project. By allowing companies to complete environmental impact studies and feasibility studies before final licensing decisions, the government has reduced the political risk associated with early-stage exploration investment.

This shift appears to represent a sustainable change in approach rather than a temporary adjustment. The current administration, now in its second term, has recognized the need for economic diversification beyond tourism, particularly as production from existing mines naturally declines over time. As Jeff Wilson observed, 

"The government recognizes that at the end of the day we can talk about mines being sustainable, but at some point they start to deplete and you need to find new mines in order to continue to have that contribution to the economy."

The timing of this regulatory improvement coincides with strong gold prices and increasing investor interest in exploration, creating favorable conditions for companies with established positions in the country. 

The presence of major producers like Barrick Gold provides additional validation of the jurisdiction's potential and creates pathways for junior explorers to monetize discoveries through partnerships or acquisitions. As production at Pueblo Viejo gradually diminishes, Barrick and other producers will need to replace reserves, potentially creating competition for quality assets in the country.

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