Nevada Gold Mines (NGM) has entered into a definitive asset exchange agreement (the “Exchange Agreement”) to acquire from i-80 Gold Corp. the 40% interest in the South Arturo Joint Venture that NGM does not already own as well as a low-cost option to acquire the adjacent Rodeo Creek exploration property, in exchange for the Lone Tree and Buffalo Mountain properties and infrastructure which are currently in care and maintenance. The exchange transaction will have an effective date of June 1, 2021.
The transaction provides NGM with a number of key benefits:
Allows NGM to consolidate production from the South Arturo open pit and the El Niño underground in the short term and capture 100% of the longer-term upside on both orebodies
Provides NGM with flexibility to pursue other potential operational synergies at Goldstrike
Provides NGM with a low-cost option to acquire 100% of the Rodeo Creek property comprised of exploration ground adjacent to South Arturo
Removes NGM’s Lone Tree closure liability with i-80 Gold providing replacement bonding for reclamation obligations as a condition to closing
Allows NGM to share in any future production at Lone Tree through a contingent payment of up to $50 million (described below)
The Exchange Agreement provides for payment to NGM of contingent consideration of up to $50 million based on mineral resources from the Lone Tree property. In connection with the asset exchange, NGM will also enter into toll-milling agreements providing i-80 Gold with interim processing capacity at NGM’s autoclave facilities until the earlier of the three-year anniversary of the asset exchange and the date on which the Lone Tree facility is operational and at NGM’s roaster facilities for a 10-year period. NGM has also agreed to reimburse i-80 Gold an amount of approximately $7.3 million for certain funding previously advanced by i-80 Gold in respect of South Arturo. Nevada Gold Mines is operated by Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) and is a joint venture between Barrick (61.5%) and Newmont (38.5%) that combined their significant assets across Nevada in 2019 to create the single largest gold-producing complex