Two Red Lake hopefuls’ shares crater on brewing Barrick beef

The narratives behind both juniors’ stories are similar. Dixie Gold announced on December 31, 2019, that it had amassed a dominant land position contiguous to both Great Bear Resources’ emerging Dixie gold and BTU Metals Corp’s Dixie Halo projects.

Similarly, Red Lake Gold rebranded mid-2019 from minnow Pivit Exploration to advance the Whirlwind Jack project, immediately west and on-trend of Great Bear’s (now Kinross Gold-owned (TSX: K; NYSE: KGC)) Dixie project.

By the Fall of 2021, both juniors had engaged with Barrick regarding a potential exploration-focused earn-in agreement on their respective projects. By November 1, 2021, Dixie Gold had signed a formal earn-in agreement with Barrick, enabling it to earn a 70% interest in the Red Lake project. Red Lake Gold signed a similar deal on the same day to platform-in Barrick as the project partner.

However, the new working arrangement was to be short-lived. On June 3, 2022, Barrick served both junior companies with writs advising them of the imminent threat that they may lose their respective underlying claims due to an assessment credit deficit.

Barrick alleged a corresponding deficit of filed exploration work otherwise necessary to generate sufficient government-approved assessment credits relating to exploration work by Barrick to keep mining claims within the Red Lake project in good standing.

According to Dixie, Barrick alleged that it had an obligation to maintain the claims for Barrick based on supposed good faith.