By Robb M. Stewart

Barrick Gold will invest 23.4 million Canadian dollars ($17.1 million) in Hercules Silver, boosting its stake in the junior miner.

The Toronto-based gold and copper producer said Monday it agreed to subscribe for about 21.3 million units of Hercules as part of a private placement for C$1.10 a unit, which each unit of the company made up of one share and 0.32 of a warrant allowing the holder to buy a share over a two-year period at C$1.32 apiece.

Barrick, which currently has a 2.7% interest in Hercules, will raise its stake to about 12% on a non-diluted basis and 15% on a partially-diluted basis. The private placement is set to close on or before Wednesday.

Barrick said it is buying the units for investment purposes.

The agreement comes after Hercules in late March moved to raise C$5 million in a fully marketed private placement, with proceeds earmarked for exploration and working capital. The company is focused on exploring and developing the Hercules Silver project in Idaho.

Provided Barrick maintains a stake of at least 5% in Hercules, a deal between the companies ensures Barrick will have the right of first refusal in respect to a sale by Hercules of any interest in its Idaho project. Barrick will also over a three-year period agrees to vote its Hercules shares based on the recommendations of Hercules' board or management or to abstain from voting on matter and is subject to a standstill agreement prohibiting it from buying more than 19.9% of Hercules outstanding shares.

Write to Robb M. Stewart at

(END) Dow Jones Newswires

11-06-23 0953ET