Barrick Gold Boosts Stake in Hercules Silver

by / ⠀Featured News / December 4, 2023
Hercules Silver Stake

Barrick Gold Announces Investment in Hercules Silver

Toronto-based gold and copper producer Barrick Gold has revealed plans to invest C$23.4 million ($17.1 million) in junior mining company Hercules Silver. This strategic investment will raise Barrick Gold’s stake in the company from 2.7% to around 12% on a non-diluted basis and 15% on a partially-diluted basis. The move will strengthen Barrick Gold’s presence in the mining industry and allow them to capitalize on the mounting demand for precious metals.

Increased Stake to Enhance Portfolio and Support Development

Through the increased stake in Hercules Silver, Barrick Gold seeks to enhance its portfolio of potential high-quality projects while supporting the exploration and development of Hercules Silver’s promising mining assets. As part of the private placement agreement, Barrick will subscribe to about 21.3 million units of Hercules for C$1.10 per unit, with each unit including one share and 0.32 of a warrant. This offers the option to purchase a share within two years for C$1.32 each.

Strategic Investment and Confidence in Hercules Potential

This strategic investment by Barrick highlights its confidence in Hercules’ potential and aligns both companies’ interests in advancing the project. The funds raised from this private placement will enable Hercules to further explore, develop, and expand upon the current mineral resources, laying the foundation for potential future growth and collaboration between the two companies.

Deal Completion and Alignment with Barrick’s Long-term Goals

The deal is set to close by or before Wednesday, and according to Barrick, the acquisition of the units is for investment purposes. This strategic move aligns with Barrick’s long-term goals of growing its portfolio and leveraging diverse market opportunities. The completion of this acquisition is expected to strengthen Barrick’s position within the industry, enabling the company to capitalize on future growth prospects.

Hercules Silver Adjusts Funding Goal Amid Market Changes

Hercules Silver previously aimed to raise C$5 million through a fully marketed private placement in late March to fund exploration and working capital. However, due to recent changes in market conditions and investor interest, the company was compelled to reevaluate its initial target amount. As a result, Hercules Silver increased its funding goal to adequately ensure the continued progress of its exploration projects and support ongoing operational needs.

Focus on Hercules Silver Project in Idaho

The main focus of the company is the exploration and development of the Hercules Silver project in Idaho. The Hercules Silver project presents a lucrative opportunity for the company to tap into the rich mineral resources found in the region. By leveraging cutting-edge technology and sustainable practices, the company aims to maximize the extraction of silver while minimizing environmental impact and ensuring the long-term viability of its operations.

Terms of the Agreement and Strategic Partnership

As per the agreement’s terms, Barrick will maintain at least a 5% stake in Hercules, as well as having exclusive first refusal rights concerning any potential sale of interest in the Idaho project. This strategic partnership showcases Barrick’s confidence in the potential of Hercules’ gold project in Idaho and its commitment to supporting the exploration and development of the site. It also signifies a pivotal step for both companies in creating a long-lasting collaborative relationship that could pave the way for future joint ventures and expansion opportunities in the mining industry.

Barrick’s Voting and Standstill Agreement

Moreover, Barrick agrees to vote its Hercules shares in line with the recommendations of the board or management for a three-year period. Additionally, a standstill agreement prohibits Barrick from owning more than 19.9% of Hercules’ outstanding shares. This strategic partnership ensures that both companies can work collaboratively without the threat of a hostile takeover. It fosters a mutually beneficial environment, enabling them to focus on expanding their operations and maximizing shareholder value.

Strengthening Alliances for Increased Competitiveness

This collaboration aims to strengthen the alliance between the two companies, allowing them to share resources and expertise to bolster their competitive position in the mining industry. The mutual support and understanding between Barrick and Hercules will ensure a seamless integration of strategies and help create long-term value for both parties and their shareholders. As Barrick Gold and Hercules Silver move forward, they are now better positioned to capitalize on the growing demand for precious metals and new opportunities in the mining industry.

FAQs

Why is Barrick Gold investing in Hercules Silver?

Barrick Gold is investing C$23.4 million ($17.1 million) in Hercules Silver to enhance its portfolio of potential high-quality projects, strengthen its presence in the mining industry, and capitalize on the mounting demand for precious metals. The investment will raise Barrick Gold’s stake in the company from 2.7% to around 12% on a non-diluted basis and 15% on a partially-diluted basis.

What does the increased stake in Hercules Silver mean for Barrick Gold?

The increased stake in Hercules Silver will allow Barrick Gold to support the exploration and development of Hercules Silver’s promising mining assets, further expand its portfolio, and capitalize on future growth prospects in the mining industry.

How will the funds from the private placement be used?

The funds raised from the private placement will enable Hercules Silver to further explore, develop, and expand upon the current mineral resources, laying the foundation for potential future growth and collaboration between the two companies.

What is the main focus of the Hercules Silver project?

The main focus of the Hercules Silver project is the exploration and development of the rich mineral resources in Idaho. The company aims to maximize the extraction of silver while minimizing environmental impact and ensuring the long-term viability of its operations by leveraging cutting-edge technology and sustainable practices.

What is the strategic partnership between Barrick Gold and Hercules Silver?

This strategic partnership showcases Barrick’s confidence in the potential of Hercules’ gold project in Idaho and its commitment to supporting the exploration and development of the site. The collaboration aims to strengthen the alliance between the two companies, allowing them to share resources and expertise, and bolster their competitive position in the mining industry.

What is the Voting and Standstill Agreement between Barrick Gold and Hercules Silver?

As per the agreement, Barrick will vote its Hercules shares in line with the recommendations of the board or management for a three-year period. A standstill agreement prohibits Barrick from owning more than 19.9% of Hercules’ outstanding shares. This strategic partnership ensures that both companies can work collaboratively without the threat of a hostile takeover and fosters a mutually beneficial environment for expansion and maximizing shareholder value.

First Reported on: marketwatch.com
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Kimberly Zhang

Editor in Chief of Under30CEO. I have a passion for helping educate the next generation of leaders.

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