Precipitate Gold (PRG) - JV with Barrick Advances. Newfoundland Assays Soon

Precipitate Gold Corp. is a Canadian mineral exploration company, with assets in Newfoundland Canada and the Dominican Republic. The Company’s projects include the Motherlode, Ponton, Pueblo Grande and Juan de Herrera projects.

The Motherlode project is located in the southeastern region of Burin Peninsula in Newfoundland and holds a 12,350-hectare land position. The company’s Juan De Herrera project is located in the Dominican Republic covering a 12,746-hectare land position adjacent to GoldQuest Mining's Tireo project. The company is assisting GoldQuest Mining Corp. to obtain the relevant permits for a preliminary economic assessment (PEA), believing that this will support Precipitate Gold Corp. in advancing its own project in the future.

The Pueblo Grande project is a 7,106-hectare land package located 50 km north of the capital city of Santo Domingo in the Dominican Republic. The company holds an earn-in agreement with Barrick Gold Corp. regarding the project, which entails Barrick Gold Corp. earning 70% of the project by spending USD$ 10 million on exploration initiatives and producing a pre-feasibility study over 6 years. The agreement also sees the issuing of a 3% Net Smelter Return (NSR) royalty on the project to Precipitate Gold Corp.  

Precipitate Gold Corp. announced in January 2023, that Barrick Gold Corp. has commenced a ground geophysical and trenching program at the Pueblo Grande project. Barrick Gold Corp. plans to focus on the near-surface high sulphidation epithermal Pueblo Viejo style gold mineralisation at the project’s Lithocap zone. The exploration program planned for early 2023 includes a 2D pole-dipole Induced Polarisation (IP) geophysical survey, the digging of up to 10 trenches targeting high sulphidation epithermal systems and conducting 3,000 m of diamond drilling at the project.

Barrick Gold JV

Precipitate Gold Corp. announced in January 2023, that Barrick Gold Corp. commenced a ground geophysical and trenching program at the Pueblo Grande project. Barrick Gold Corp. plans to focus on the near-surface high sulphidation epithermal Pueblo Viejo style gold mineralisation at the project’s Lithocap zone.

Jeff Wilson, President and CEO of Precipitate Gold Corp. explains that Barrick Gold Corp. has the opportunity to earn a 70% position in the Pueblo Grande project, through various exploration initiatives including spending USD$ 10 million towards exploration over 6 years and providing a pre-feasibility study.

“We’ve got an earn-in agreement with Barrick whereby Barrick has a right to earn 70% interest in our Pueblo Grande project, which is adjacent to their world-class Pueblo Viejo mine. They’ve got to spend USD$ 10 million over 6 years and provide a Pre-Feasibility Study, to earn that 70%. We’re entering into the third year here of the earn-in agreement, and Barrick has advised us on some of their exploration plans for the next phase. We’re quite excited about some of the targets that they are targeting in this next phase of work.”

The exploration program planned for early 2023 includes a 2D pole-dipole Induced Polarisation (IP) geophysical survey, the digging of up to 10 trenches targeting high sulphidation epithermal systems and conducting 3,000 m of diamond drilling at the project.

“It’s a combination of both near-surface epithermal style mineralisation, just immediately to the west of their existing open pits at Pueblo Viejo, and also what’s quite interesting and exciting to us is they’re also looking at targeting a concealed potential porphyry target as well at depth. A significant amount of groundwork, including some IP lines that they will be surveying over that area, which is ground geophysics, as well as trenching and reinterpretation of a lot of existing prior data.”

Wilson explains that Barrick Gold Corp. will before spring 2023 have spent approximately USD$ 1.5 million in total towards the exploration of the Pueblo Grande project. The costs include not only the conducting of exploration drilling, which will be the greatest cost but also the Geophysical analysis of the targets and sampling programs.

“The work commitment expenditure under the agreement calls for them to spend USD$ 1.5 million between now and the spring, so we expect to see them get quite aggressive. I mean, the type of drilling that they would contemplate doing, we think will be quite comprehensive. So, we think they can hit that USD$ 1.5 million quite easily. And that’s not just drilling, that’s all the work that goes into this phase of work.”

Wilson anticipates that Barrick Gold Corp. will initiate the exploration drilling program in early 2023 with all the necessary works having been conducted.

“The IP work in preparation has been done. Quite frankly, the drill planning and plotting of drill locations have been done by the Barrick team. So, we don’t expect a lot more in the way of downtime before they’re able to get that up and running and get that executed.”

Drilling and reporting

The Pueblo Grande project is a 7,106-hectare land package located 50 km north of the capital city of Santo Domingo in the Dominican Republic. The project is located immediately adjacent to the Pueblo Viejo mine of Barrick Gold Corp.  The proximity of the project to the mine creates an ideal environment for Barrick Gold Corp. to conduct exploration initiatives, with its own resources including drill rigs.

“They’ve got access to all the necessary equipment there from Pueblo Viejo, so no real problems there in terms of importing, exporting, that kind of stuff. We expect the drills to be on hand and on-site quite promptly.”

Jeff Wilson explains that under the terms of the earn-in agreement, Barrick Gold Corp. is required to issue a quarterly activities report to Precipitate Gold Corp. The report enables Precipitate Gold Corp. to be able to publish news releases, which assists the company in not only its market presence but also valuation.

“We’ve found that our relationship and data and information exchange with Barrick has been quite good. They’ve been quite transparent with us, quite frankly, about their plans and intentions and the work that they’ve done. Under the terms of the agreement, it calls for a quarterly update from them, so each quarter, we do receive a fairly in-depth report from them on the work that’s been done and the work that’s being proposed.”

The relationship between Precipitate Gold Corp. and Barrick Gold Corp. is also of such a nature that the companies freely exchange information, according to Wilson.

“Any approved budget for future work or plans that are approved by Barrick is advanced to us for review as well. Again, you look at the news release that we put out earlier this year about the work that’s being done and some of the plans that they have - again, they were quite good at recognising the importance of that kind of information for our shareholders. A quick review of the news release and they came back to us and signed off and said, ‘Yeah, no problem, go ahead and report that.’ They’ve been good, but it’s mandated in the agreement to be a quarterly update.”

The importance of the JV according to Wilson, is the security it provides. He explains that even though Precipitate Gold Corp. is not built to be a project generator, the size of the Pueblo Grande project, coupled with the funds needed to advance it, justifies entering into such a JV.

“We really are not built to be a project generator. The intention was not necessarily to do deals with majors as passive partners. But in this instance, we saw that this is a big land package, there was the potential for there to be misses before there were hits, and we think that given the circumstances, having Barrick finance this work and do good science, systematic exploration, to get these things to a drill stage could have been fairly dilutive, too capital intensive and dilutive to a junior company like Precipitate.”

Juan De Herrera project

The company’s Juan De Herrera project is located in the Dominican Republic covering a 12,746-hectare land position adjacent to GoldQuest Mining's Tireo project. The project holds intermediate sulphidation epithermal and VMS-style deposits. Precipitate Gold Corp. is assisting GoldQuest Mining Corp. to obtain the relevant permits for a preliminary economic assessment (PEA), believing that this will support Precipitate Gold Corp. in advancing its own project in the future.

“That project has been stalled a little bit due to delays in getting an exploitation permit. Essentially, GoldQuest is looking to do the necessary geotechnical work to advance this to a Pre-Feasibility or Feasibility stage. So, we’ve elected to sit on that ground adjacent to GoldQuest until there’s a little bit more clarity of path and really, the delays there, yes they fall on the shoulders of the government because it’s the government and the ministry that is not granting the permit or the licence, but I think it’s important to note that it’s sort of a local issue.”

Wilson explains that even though obtaining permits is a federal function, the challenges of the area are due to local factors.

“The federal government has essentially said, ‘Look, we don’t want any pushback from this if we grant this permit, so please, GoldQuest, go and spend some time dealing with the local community, with any local opposition, and try to get everybody onside with recognising the benefits of this permit versus the detriments. So, there’s been some time put into doing that. We’ve been rolling up our sleeves and trying to help GoldQuest on that front as well, believing that their success will be to the benefit of all of us.”

The Motherlode project and future initiatives

The Motherlode project is located in the southeastern region of Burin Peninsula in Newfoundland and holds a 12,350-hectare land position. The project boasts all-year roads, as well as good logistical infrastructure and high-power electrical lines running through the project. Wilson explains that the company after having created the JV with Barrick Gold Corp. and whilst underway with social licensing issues at its Juan De Herrera project, realised that as an exploration company, it required an asset to explore.

“In Newfoundland, again, when we did the deal with Barrick and because our Juan de Herrera project was on hold, we recognised that as a junior exploration company, sitting idle and being at the mercy of someone else is not going to get anybody excited, so we are a discovery team, we are built to go out and find something new and make discoveries.”

The company conducted exploration drilling at the Motherlode project in 2022, with the assay results pending. Wilson believes that the assay results will show the potential of the project and should justify a phase 2 exploration drilling program at the project.

“I think the drilling went according to plan. We’re fairly pleased with the process if you will. We didn’t have any real weather problems or issues, and as I said, we intersected or bisected the types of targets that we were targeting and again, at this point, we’ll see what the assays come back and look like when we get that back from the lab.”

Precipitate Gold Corp. sits with a cash position of approximately CAD$ 7 million, which is primarily due to the sale of non-crucial land at the Pueblo Grande project to Barrick Gold Corp. The company is investigating the best use of its funds, which may include the acquisition of an asset or the possible merger with another junior company to supplement its leadership team.

“What we’ve been doing since May when that transaction was completed is looking outside of the current portfolio at what ways we could leverage that cash into something accretive. Is there an acquisition to be had where a project that maybe has been orphaned or the company owner is not able to access the capital necessary to advance it, where we could come in and acquire that asset and have the cash to deploy on it immediately? Is there an M&A opportunity where someone’s property portfolio and our cash, with combined personnel, maybe makes 1 plus 1 equal something greater than 2?”

To find out more, go to the Precipitate Gold website