Asante Gold purchases Ghana mine from Resolute Mining Ltd for $90 million

Mine in Ghana, dug into the side of a pit.

Australian gold mining company Resolute mining Ltd announced they would be selling its entire Bibiani Mine in Ghana to Canada’s Asante Gold Corp for $90 million US dollars. The agreement was announced on Thursday that Asante Gold would purchase 100 percent of the shares in Mensin Bibiani Pty Ltd as they expressed interest in owning the full Bibiani mine in Ghana. 

According to a statement from Asante Gold, it is anticipated to be completed within the following ten days post announcement. 

The agreement has been approved by the Ghanaian Honourable Minister of Lands and Natural Resources along with Ministerial Consent. 

The Ghanaian Honourable Minister for Lands and Natural Resources, Hon. Samuel A. Jinapor, MP, said, “I commend the recent approach of Resolute and Asante in their dealings with the Ministry for Lands and Natural Resources, and I am pleased to support the transition of ownership of Bibiani to Asante.” 

This sale between Resolute mining and Asante Gold is just months after China’s Chifeng Jilong Gold Mining dropped out of a deal to purchase the Bibiani mine. This was due to a lack of information regarding a termination of a mining lease. 

The $90 million payment will be completed in three stages, with $30 million being paid out at each step. Once upon the initial purchase, on or before six months after the deal is completed, and on or before 12 months upon completion. 

Shareholder Value

In the same statement from Asante Gold, Mr. Stuart Gale, Resolute’s Managing Director & Chief Executive Officer, said, “Resolute has made a commitment to deliver sustainable and enduring value to shareholders and to 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. I would once again like to reiterate my sincere gratitude to the Minister for his leadership, sense of integrity, and collaboration with Resolute and Asante to achieve a mutually beneficial outcome for all parties. Similarly, Resolute would like to acknowledge the significant contribution made towards this outcome by the Ghana Minerals Commission. I am confident that Resolute’s positive legacy in Ghana, and the interests of all stakeholders in Bibiani, will be protected and enhanced under Asante’s ownership.”

Gale also added that the initial $30 million would be applied for the voluntary repayment of debt. 

Resolute Mining Ltd has more than 30 years of experience in successfully exploring, operating, and developing mines in Africa and Australia. They have mined over 8M oz of gold and currently operate the Syama Gold Mine in Mali and the Mako Gold Mine in Senegal.

Asante Forges Ahead

Asante Gold is Africa’s largest and safest gold producer; they are strictly a gold exploration and development company. Ghana’s largest underground mine has developed 24M oz of gold resources and reserves over the years. Asante is also exploring new projects and discoveries near the centre of Ghana’s Golden Triangle.

Asante’s President & CEO, Mr. Douglas MacQuarrie, explained in the same statement that the Bibiani mine has essentially not been taken care of properly since Ashanti Goldfields dropped the project back in 2006. He is excited for the team to “achieve near-term economic returns on this very long-life asset.” 

“Resolute has reported in their Bibiani Feasibility Study Update (see ASX Announcement dated 13 July 2018) 2.5 Moz (21.7 million tonnes grading 3.6 g/t) of gold in current JORC resources, and Asante has recognized additional exploration upside opportunities, both from the near surface and underground targets. It is Asante’s intention, as far as is reasonably practicable, to continue building on the excellent base which Resolute has established through its recent 50,500 metres of drilling.”

MacQuarrie also added, “Asante is already exploring on-site and building the management and operations team with a view to bring the Bibiani mine back to production within the next year. Further discussions are underway to fully fund the acquisition and its development using non-dilutive financing.”

The Bibiani mine in Ghana is historically significant and has produced 4 million oz gold in the past. Both Resolute and Asante are committed to a smooth transition in the ownership of the Ghana mine. Asante also announced future plans to co-list shares on the Ghana Stock Exchange. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

By Matthew Evanoff

I cover the mining industry and the best mining stocks around the world. I write about industry news, individual companies, projects, management, and profiles on industry leaders.

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