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Barrick to take stake in Carpathian

Carpathian Gold Inc. says Barrick Gold Corp. will take a 9 per cent stake in the gold development company for $20-million.

Barrick will buy 38.5 million shares for 52 cents apiece. Its shares closed up 6 per cent at 58 cents each on Friday.

The gold exploration and development company will use the cash to help fund development on its Rovina Valley Project in Romania.

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The agreement gives Carpathian access to Barrick's technical expertise through a committee of three Carpathian and two Barrick representatives.

"We view the transaction with Barrick as a significant endorsement of the Rovina Valley Project, our exploration team and Romania as a country with world-class mining potential," said Carpathian's president and chief executive officer Dino Titaro.

"Equally important is the fact that these added funds together with access to Barrick's expertise will provide a major step up in Carpathian's development plans for the Rovina Valley Project."

Barrick has the right to participate in any future equity offerings and right of first refusal on the sale of the company's Romanian assets, as long is its interest does not fall below 8.5 per cent.

The deal is expected to close Aug. 1 and is subject to customary conditions and regulatory approvals.

Carpathian's primary project is the development of gold production at its Riacho dos Machados Gold Project in Brazil, as well as the Rovina project.

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