Asante Gold to acquire Bibiani gold mine from Resolute Mining for US$90m

GHANAResolute Mining Ltd has announced that it has agreed to sell its Bibiani gold mine in Ghana to Asante Gold Corp. for US$90 million in cash.

The company will receive an initial US$30 million payment, followed by another US$30 million on or before six months from the transaction close. The final US$30 million is set to come on or before a year from completion, Resolute said.

The Western Australia-based miner had inked in December a US$105 million sales deal with China’s Chifeng Jilong Gold Mining, which fell flat after Ghana suddenly cancelled the mining lease, ordering Resolute to halt operations.

The deal would have marked the Chinese miner’s second overseas acquisition, after it bought a 90% stake in the Sepon gold and copper mine in Laos in 2018.

Resolute said the deal with Asante had already been approved by Ghana’s minister of lands and natural resources, adding that it expected to complete it in the next 10 days.

Bibiani’s sale would reduce Resolute’s portfolio to only two assets, Syama in Mali and Mako in Senegal.

“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.

“Resolute has made a commitment to deliver sustainable and enduring value to shareholders and the communities in which we operate.”

Stuart Gale – MD and CEO, Resolute Mining Ltd

The transaction is consistent with our strategic focus on our core operating assets and strengthening the balance sheet, with the initial cash receipt of US$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.”

Asante president and CEO Douglas MacQuarrie 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 US$650/oz,” said MacQuarrie.

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 US$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.

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