Canadian exploration company Hercules Metals has signed a strategic agreement with Barrick Gold to consolidate control of a 73-km copper belt surrounding its flagship Leviathan discovery in Idaho.
The US copper project deal offers Hercules the option to acquire the “Olympus” claims more than 29 950 ha of unpatented mining ground from Barrick’s US subsidiary, in exchange for staged payments totalling C$8 million over three years.
Hercules may make the payments in either cash or stock, subject to regulatory approval and limitations on Barrick’s ownership stake, which cannot exceed 19.9%.
When fully exercised, the US copper project deal would increase Hercules’ total land holding to over 40470 ha, making it the biggest claim holder on what the company refers to as “America’s newest porphyry copper district.”
“Consolidating the 73-km Olympus copper belt represents a once-in-a-lifetime opportunity for Hercules shareholders and signifies a strong endorsement of our team’s execution and vision,” CEO Chris Paul said in a statement. “We are honoured by Barrick’s confidence as we advance Leviathan alongside a greatly expanded district-scale exploration strategy moving forward.”
Paul added that the Leviathan system hosts “evidence of a rare and exceptional copper-silver enrichment event” likely tied to regional tectonic activity across the Olympus belt, calling it “one of the largest and most compelling new copper projects in the United States today.”
In terms of the agreement, Hercules will also issue Barrick a 1% net smelter return royalty on the Olympus claims, 0.75% of which can be repurchased for $7.5-million. The company retains the right to accelerate the option at any time.
Paul said the transaction comes amid sweeping changes to the US mining industry, such as streamlined permitting and a suggested 50% tariff on imported foreign copper. “The impacts of this, alongside rising prices and declining reserves in the US, position Hercules to deliver exceptional value for our shareholders moving forward,” he said.