TGZ Buys Similar Sized Deposit To AXM's Passendro Mine For $380 Million
Axmins joint venture partner in Senegal announced today that they purchased 90% of a 2.6 million ounce gold deposit from Barrick for $380 million. This is significant for two reasons:
1) Axmin's Passendro gold mine has a proven resource of 2.5 million ounes, two million being higher grade and the rest lower grade. Regardless, it's similar in size.
2) Axmin still has a 20% interest in Senegal with Teranga Gold on 338km2 of land, along with 17 royalty targets.
AXM recently announced going back to site a couple weeks ago to survey Passendro, therefore making the project real again, alongside a meeting with the joint venture partner this month (see latest news release). This is again proof that the company trades at a major discount to it's peers.
From the Teranga Gold news today:
Teranga Gold to acquire 90% of Massawa project
2019-12-10 05:42 MT - News Release
Mr. Richard Young reports
TERANGA GOLD TO ACQUIRE HIGH-GRADE MASSAWA GOLD PROJECT, ACCELERATES REPOSITIONING AS LOW-COST, MID-TIER PRODUCER
Teranga Gold Corp. has entered into a definitive agreement pursuant to which it will acquire a 90-per-cent interest in the Massawa gold project from a wholly owned subsidiary of Barrick Gold Corp. and its joint venture partner, Compagnie Senegalaise de Transports Transatlantiques Afrique de l'Ouest SA (CSTTAO), with the government of Senegal holding the remaining 10-per-cent interest in Massawa. (All amounts are in U.S. dollars unless otherwise stated)
Massawa is one of the highest-grade undeveloped open-pit gold reserves in Africa (2). It is located within trucking distance of Teranga's flagship Sabodala Gold Mine ("Sabodala") in Senegal, creating the opportunity for significant capital and operating synergies(3). The proximity of the projects and the combination of Sabodala's mill and Massawa's high-grade ore (the "Sabodala-Massawa Complex") are expected to scale Sabodala into a top tier asset.
"The Massawa acquisition is transformational for Teranga and - by creating a top tier gold complex - the first in the country - an important milestone for the gold mining industry in Senegal," said Richard Young, Teranga's President and Chief Executive Officer. "We anticipate that production from the Sabodala-Massawa Complex, together with our Wahgnion Gold Mine ("Wahgnion") in Burkina Faso, will increase Teranga's targeted consolidated annual gold production and reposition Teranga as the next multi-asset, low-cost, mid-tier gold producer in West Africa, one of the world's premier gold mining regions."
Total aggregate consideration for the Transaction is $380 million upfront (the "Upfront Consideration") plus a gold price-linked contingent payment (the "Contingent Consideration" and together with the Upfront Consideration, the "Consideration"). The Consideration will be in the form of cash and common shares of Teranga ("Teranga Shares"). See below for details on the financing of the Transaction.
Transaction Highlights
Teranga to acquire one of the highest-grade undeveloped open-pit gold reserves in Africa (2)
The historical mineral reserves base of the Massawa project is 2.6Moz from 20.9Mt at 3.94 g/t Au and is one of the highest-grade undeveloped open-pit gold reserves in Africa. This will augment Sabodala's mineral reserves base of 2.4Moz from 55.7Mt at 1.35 g/t Au (see Appendix, Tables 1 and 2).
