MINING NEWS: Barrick Gold buys stake in Northwest Territories diamond explorer

Barrick Gold Corp. has acquired an 11 percent stake in Northwest Territories diamond explorer Diamondex Resources Ltd., Canada’s biggest gold producer said May. 18.

Barrick said it acquired 7.55 million units of Diamondex for 90 cents cash each in a private placement, a deal worth an estimated $6.8 million.

Each unit was made up of a common share and a purchase warrant that gives the company the right to buy another Diamondex share for $1.25 for the next two years.

Barrick said it has the right to nominate one director to the Diamondex board and to maintain its proportionate interest in Diamondex if more common shares or convertible securities are issued, so long as Barrick remains a minority shareholder in the company.

Barrick also agreed to buy another 3.5 million units on the same terms and conditions, subject to approval from Diamondex shareholders, the gold miner said.

Barrick said it acquired the units for investment only, but added that it may change its ownership in the future.

On the Toronto Stock Exchange, Barrick shares (TSX:ABX) rose 14 cents to close at $27.69 on May 18. Diamondex shares fell three cents to 94 cents on the TSX Venture Exchange.

—The Associated Press