Agree to US$10.0M Earn-In Agreement on Precipitate’s Pueblo Grande Project and US$1.0M Private Placement
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Precipitate and Barrick Gold Corporation
Agree to US$10.0M Earn-In Agreement on Precipitate’s Pueblo Grande
Project and US$1.0M Private Placement
Vancouver, B.C. – April 14, 2020 - Precipitate Gold Corp. (“Precipitate” or the “Company”) (TSXV: PRG) is
pleased to announce that it has signed a definitive earn-in agreement (the “Agreement”) with Barrick Gold
Corporation (“Barrick”) (NYSE: GOLD) (TSX: ABX) whereby Barrick has the right to earn a 70% interest in the
Company’s Pueblo Grande Project (the “Project”) loc ated immediately adjacent to Barrick’s world-class
Pueblo Viejo gold-silver mine in the Dominican Repu blic. To earn its interest, Barrick must incur a
minimum US$10.0 million in exploration expenditures and deliver a qualifying Pre-feasibility Study prior to
the sixth anniversary of the Agreement. In addition, Barrick has agreed to subscribe for the Canadian dollar
equivalent of US$1.0 million of Precipitate’s common shares in a private placement.
In accordance with the terms of the Agreement, to e arn a 70% interest in the Project, Barrick must (th e
“Earn-in Conditions”):
- Incur a minimum of US$10.0 million in qualifying Wo rk Expenditures prior to the sixth
anniversary of the entering into of the Agreement as follows:
o US$2.0 million in aggregate before the second anniv ersary, with a US$1.0 million guaranteed
minimum expenditure before the second anniversary;
o US$3.5 million in aggregate before the third anniversary;
o US$5.0 million in aggregate before the fourth anniversary;
o US$7.0 million in aggregate before the fifth anniversary; and
o US$10.0 million in aggregate before the sixth anniversary;
- Complete a minimum of 7,500 metres of drilling befo re the sixth anniversary of the entering into
of the Agreement; and
- Deliver a qualifying Pre-Feasibility Study before t he sixth anniversary of the entering into of the
Agreement
Shortfalls in required Work Expenditures may be paid by Barrick to Precipitate as cash in lieu to sati sfy the
Work Expenditures’ requirement. Barrick may at any time accelerate any or all of the Work Expenditures
and excess Work Expenditures in any year shall apply against any future years’ obligations.
TSX VENTURE: PRG | www.precipitategold.com
625 Howe Street, Suite 1020, Vancouver, BC, V6C 2T6
Toll free: 855 558 0335
Direct: 604 558 0335
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Jeffrey Wilson, President & CEO, stated, "We are pleased to announce the agreement with Barrick whereby
one of the largest gold mining companies in the wor ld has agreed to a substantial earn-in arrangement to
advance our 100% owned Pueblo Grande Project to a p re-feasibility stage in exchange for a 70% interest .
The work expenditure commitments and expeditious ti meline to completion of a Pre-Feasibility Study
supports the Company’s belief that the Pueblo Grand e Project represents an important and prospective
land package warranting a substantial budget for extensive property-wide exploration and drilling. Barrick’s
technical and financial capacity to conduct this wo rk provides Precipitate shareholders with upside
leverage, while mitigating risk and limiting potent ial share dilution to finance work programs of this scale.
Should Barrick’s work prove successful in delineati ng a meaningful minable resource, Precipitate will be
carried for a significant retained interest with no cash outlay by the Company. The injection of addit ional
capital into the Company from the US$1.0 private pl acement (C$1.39M) allows Precipitate to continue the
advancement of its other 100%-owned Dominican Republic projects while gaining an important, long term
shareholder with significant in-country prominence and expertise. Our exploration focus will immediate ly
turn to near term drill targets emerging within the Company’s nearby Ponton gold project and the ongoing
advancement of existing targets at the Juan de Herr era project, immediately adjacent to GoldQuest’s
Romero project.”
Upon satisfaction of the Earn-in Conditions and del ivery of an exercise notice, Barrick and Precipitat e will
form a Joint Venture to be owned 70% by Barrick and 30% by Precipitate. At Precipitate’s election, whi ch
must be made within 120 days of the approval by the Joint Venture of a Feasibility Study, Barrick will be
obligated to provide Precipitate’s portion of any d ebt financing or arrange for third party financing of
Precipitate’s portion of any debt financing require d to construct a mine on the Project described in t he
Feasibility Study in consideration for the transfer by Precipitate to Barrick of a 5% interest in the Joint
Venture. Dilution of the Company’s interest in the Joint Venture below 10% will result in the conversion of
Precipitate’s interest to a 1.5% Net Smelter Return (“NSR”) royalty on any concessions without pre-existing
NSRs as of the date hereof, and a 1.0% NSR royalty on any concessions with pre-existing NSRs as of the
date hereof, applicable to all recovered products.
Barrick has also subscribed for the Canadian dollar equivalent of US$1.0 million in a private placemen t of
the Company’s common shares at a price per share ba sed on the volume weighted average price of the
Company’s shares on the TSX Venture Exchange (“TSXV ”) for the 30 trading days preceding the date
hereof. As such, Barrick will be issued 12,713,636 common shares of Precipitate at a price of $0.11 pe r
share for gross proceeds of C$1,398,500. Upon closi ng, Barrick will control 12.02% of the Company’s
outstanding common shares (on an undiluted basis). Closing of the private placement is subject to
approval from the TSXV.
As operator of the Project, Barrick will prepare Programs and Budgets in respect of the Project and provide
Precipitate copies of each approved Program and Budget within 30 days of its approval. In addition, Barrick
will prepare and provide to Precipitate, by the 45th day after the end of each calendar quarter, a quarterly
report in respect of the preceding quarter that des cribes all work conducted on the Project, including all
data and results derived from such work.
In the event Barrick elects to withdraw from the Agreement prior to having earned a 70% interest or fails to
fulfill the qualifying Work Expenditures, including delivery of a qualifying Pre-feasibility Study bef ore the
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sixth anniversary, Barrick will forfeit all rights and interests in the Project to Precipitate with all concessions
in good standing.
About Precipitate Gold:
Precipitate Gold Corp. is a mineral exploration com pany focused on exploring and advancing its mineral
property interests in the Pueblo Viejo Mining Camp and Tireo Gold Trend of the Dominican Republic.
Precipitate is also actively evaluating additional high-impact property acquisitions with the potentia l to
expand the Company's portfolio and increase shareholder value.
Additional information can be viewed at the Company’s website www.precipitategold.com .
On Behalf of the Board of Directors of Precipitate Gold Corp.,
“Jeffrey Wilson”
President & CEO
For further information, please contact:
Tel: 604-558-0335 Toll Free: 855-558-0335 [email protected]
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies
of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other
than statements of historical fact, included herein are forward looking information. Generally, forward-looking information may be identified by the
use of forward-looking terminology such as "plans", "expects" or "does not expect", "proposed", "is ex pected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such w ords and phrases, or by the use of words or
phrases which state that certain actions, events or results may, could, would, or might occur or be ac hieved. This forward-looking information
reflects Precipitate Gold Corp.’s (“Precipitate” or the “Company”) current beliefs and is based on information currently available to Company and on
assumptions it believes are reasonable. Forward-loo king information is subject to known and unknown ri sks, uncertainties and other factors that
may cause the actual results, level of activity, performance or achievements of Precipitate to be materially different from those expressed or implied
by such forward-looking information. Such risks and other factors may include, but are not limited to: the exploration concessions may not be
granted on terms acceptable to the Company, or at a ll; general business, economic, competitive, political and social uncertainties; the concessions
acquired by the Company may not have attributes similar to those of surrounding properties; delay or failure to receive governmental or regulatory
approvals; changes in legislation, including enviro nmental legislation affecting mining; timing and av ailability of external financing on acceptable
terms; conclusions of economic evaluations; and lac k of qualified, skilled labour or loss of key indiv iduals. Although Precipitate has attempted to
identify important factors that could cause actual results to differ materially from those contained i n forward-looking information, there may be
other factors that cause results not to be as antic ipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-
looking information. Precipitate does not undertake to update any forward-looking information, except in accordance with applicable securities
laws.