Gold miner Resolute Mining has struck a $90-million deal with Asante Gold to sell its Bibiani gold mine, in Ghana.
Resolute earlier this year was forced to terminate a $105-million sales agreement over the Bibiani project with China’s Chifeng Jilong Gold Mining Co, after the Ghanaian Minerals Commission terminated the mining lease for the Bibiani gold mine and ordered Resolute to cease all activities and operations at the mine site.
Resolute told shareholders on Thursday that Asante had strong ties to Ghana, with Ghanaian citizens holding a significant shareholding in the company, as well as board and executive roles.
Asante has announced plans to co-list its shares on the Ghana Stock Exchange, and is committed to injecting the necessary capital to rapidly restart the Bibiani operation. The company is already listed on the Canadian Securities Exchange and the Frankfurt Stock Exchange.
A 2018 feasibility study into a Bibiani restart estimated that the project could produce some 100 000 oz/y over a ten-year mine life, at a total capital cost of around $115-million.
The project is currently estimated to host some 21.7-million tonnes, grading 3.6 g/t gold for 2.5-million ounces of contained gold.
“Resolute has made a commitment to deliver sustainable and enduring value to shareholders and the communities in which we operate. Resolute is proud of its contribution to Ghana and particularly proud to have the opportunity to transfer ownership in Bibiani to a highly regarded team with strong ties to Ghana,” said MD and CEO Stuart Gale.
“The transaction is consistent with our strategic focus on our core operating assets and strengthening the balance sheet, with the initial cash receipt of $30-million to be applied to the voluntary repayment of debt. We do not expect there to be any material tax implications following the completion of this transaction.”
The $90-million cash consideration would be payable in three tranches, with the first $30-million deposit already having been received by Resolute. The next $30-million installment will become due six months after the completion of the transaction, with the remaining $30-million due on or before the 12-month mark post completion.
Asante president and CEO Douglas MacQuarrie on Thursday said that the company had identified Bibiani as a commercial and strategic investment, saying that the company’s investment strategy at the mine was to achieve near-term economic returns on a long-life asset.
“Bibiani is a sleeping giant – essentially unmined and on care-and-maintenance since Ashanti Goldfields exited the project in 2006 when gold was just $650/oz,” said MacQuarrie.
Resolute has reported 2.5-million ounces of gold in current mineral resource, and Asante has recognized additional exploration upside potential, both from near-surface and underground targets. MacQuarrie said that Asante’s would, as is reasonably practicable, continue to build on the base which Resolute has established.
“Asante is already building the management and operations team with a view to bring the Bibiani mine to production within the next year. Further discussions are under way to fully fund the acquisition and its development using non-dilutive financing.”
Ghana Minister for Lands and Natural Resources Samual Jinapor said that the government was pleased to support the transition of ownership of Bibiani to Asante.
The transaction is expected to be finalized within the fortnight.
