SHARES in Papua New Guinea copper explorer Coppermoly jumped more than 40% on the Australian Stock Exchange (ASX) on the back of news the company had signed an agreement with a wholly-owned subsidiary of Barrick Gold, one of the world’s largest mining companies.
Barrick Exploration has teamed up with Coppermoly and its subsidiary Copper Quest PNG to fund up to A$20 million (K48.85 million) through a farm-in and joint venture agreement (JVA).
Barrick will subscribe for 6.31 million fully paid ordinary shares in Coppermoly Ltd at A$0.09 per share – this represents 5% of the share capital of the company.
The agreement will give Barrick a 72% cut in Coppermoly’s three tenements on New Britain Island, Papua New Guinea, including exploration licences EL 1043 (Nakru), EL 1077 (Simuku) and EL 1445 (Taleumas).
The three tenements are known to be prospective for a Tier 1 size copper project on the island of New Britain in PNG.
Following the announcement, shares in Coppermoly were up A$0.045, or 42.9%, to A$0.15.
As part of the deal, Barrack has committed to a minimum expenditure of A$3 million (K7.33 million) within the first three years.
If Barrick withdraws at any time after it has met the minimum expenditure but before it earns 72% equity in the farm-in, it will not retain any interest in the exploration licences.
Barrick must sole fund minimum expenditure of A$20 million on exploration expenditure within 8 years of commencement date to earn 72% equity.
Coppermoly managing director Peter Swiridiuk said the deal with Barrick provided recognition that his company’s New Britain copper projects had great potential.