Barrick sees merit in Tan Range property
Attention Business Editors:
Tan Range and Barrick to develop Itetemia - Golden Horseshoe
VANCOUVER, June 2 /CNW/ - Tan Range Exploration Corporation
Alberta Stock Exchange Symbol: TNX
Tan Range Exploration Corporation (''Tan Range'') and Barrick Gold
Corporation (''Barrick'') have signed a Heads of Agreement under which Barrick
will provide $Cdn3,000,000 to Tan Range by way of three private placement
subscriptions for common shares of Tan Range, namely:
1,428,571 shares (at) $Cdn 0.70 per share on signing of the formal
agreement
1,176,471 shares (at) $Cdn 0.85 per share within six months after
signing of the formal agreement, and
1,000,000 shares (at) $Cdn 1.00 per share within 12 months after signing
of the formal agreement.
Tan Range will expend 80% of the funds from each of these placements in
exploration of the Itetemia property before the next placement is due.
Barrick will have the option to subscribe for an additional 740,741
shares at $Cdn 1.35 per share within 18 months after signing of the formal
agreement (the ''Last Initial Placement''), and will have the right through
private placements from time to time to maintain its interest in Tan Range.
80% of the funds from all of these private placements will be committed to
development of the Itetemia property. Barrick will also have the right to
increase the level of funding of the project directly to accelerate its
development.
In consideration for the above and subject to Barrick completing the four
placements, Tan Range will grant Barrick the exclusive option (the
''Option''), exercisable within 4 years of the date of signing, to earn a 51%
interest in the Itetemia property. To exercise the Option Barrick must make a
positive production decision with respect to the property either on a ''stand
alone'' basis or by treating the ore from the property in Barrick's adjoining
Bulyanhulu mill on a custom milling basis. In either event the decision must
contemplate the production of gold at an annual rate of not less than 100,000
ounces per annum.
Upon making a positive production decision with respect to the property,
Barrick will have the right to increase its interest to 60% by arranging
financing for the project.
If the property is not in production on a ''stand alone'' basis within 18
months (or within 12 months for a custom milling operation) after a production
decision, Barrick will be penalized for delays and will make payments to Tan
Range as follows:
1st year US$ 500,000
2nd year US$ 750,000
3rd year US$1,000,000
4th year US$1,200,000
5th and subsequent years US$1,200,000 per annum
Payments due after year 5 will be adjusted for inflation based on the
Canadian Consumer Price Index.
The agreement will be subject to normal legal and title due diligence, to
completion and execution of a formal agreement and to all necessary corporate
and regulatory approvals.
Barrick Gold Corporation is a leading gold producer focused on low-cost
production growth from high quality assets. The Company is entering a new era
of growth and is expected to produce 3.6 million ounces of gold at a cash
operating cost of US $125 in 1999.
Tan Range is a gold company which holds a large portfolio of exploration
licences in the Lake Victoria greenstone region of Tanzania. This region of
Africa has attracted the world's major gold producers with the discovery of
several multi-million ounce deposits. Due to its early involvement in gold
exploration in Tanzania, Tan Range now controls some of the region's key
exploration licences. Exploration funding of these licences is being provided
by the world's major gold companies; Newmont, Barrick, and Ashanti .
ON BEHALF OF THE BOARD
''Marek Kreczmer''
MAREK J. KRECZMER, M.Sc., P.Eng.
President and Chief Executive Officer
The Alberta Stock Exchange has neither approved nor disapproved of the
information contained herein.
-0- 06/02/1999 |
