Orex Minerals and Agnico Eagle Mines have formed a joint venture to pursue development of Orex’s Barsele gold project 600 km north of Stockholm, Sweden. The project has an estimated NI 43-101-compliant indicated resource dated November 30, 2012, of 14.1 million mt grading 1.21 g/mt gold for 547,000 oz of contained gold and an estimated inferred resource of 20.2 million mt grading 0.97 g/mt gold for 627,000 oz of contained gold.
Pursuant to the joint-venture transaction, Agnico Eagle has acquired a 55% interest in the operating company that owns the Barsele project for an initial payment to Orex of $6 million, with an additional $2 million payable to Orex in cash or Agnico Eagle shares, at Agnico Eagle’s election, on each of the first and second anniversaries of the closing, dated June 11. As part of the transaction, Agnico Eagle has committed to spend $7 million on project expenditures over three years and will earn an additional 15% interest in the operating company if it completes a prefeasibility study.
Also pursuant to the transaction, Orex has been granted a 2% net smelter royalty on production from Barsele that may be repurchased by Agnico at any time for $5 million. Agnico will have a majority of board seats of the operating company and will be the operator of the project for agreed compensation.
The Barsele mineral claims total 32,709 ha. The gold mineralization is predominantly hosted within a medium-grained, highly fractured granodiorite that ranges in width from 200 m to 500 m and has a strike extent of more than 8 km. The intrusion bends from an east-west orientation in the east to a northwest trend in the west, where three major zones of gold mineralization have been identified: the Central, Avan, and Skiråsen zones. The Central and Skiråsen zones have a combined strike length of 1.4 km and a width of 250 m. A fourth mineralized gold zone, Skirträskbacken, is located approximately 3 km southeast of the Central zone.
Orex is a Canadian-based junior exploration company headquartered in Vancouver, British Columbia. In addition to the Barsele project, its projects include the Los Crestones gold-silver project in Sinaloa, Mexico; the Jumping Josephine gold-silver project in British Columbia; and the Coneto gold-silver project in Durango, Mexico, currently under option to Fresnillo plc.