Shanta Gold (AIM: SHG), the East Africa-focused gold producer announces that it has entered into a definitive agreement pursuant to which it will purchase 100% of the shares of Barrick’s subsidiary Acacia Exploration (Kenya) Ltd. (“AEKL”) from two subsidiaries of Barrick Gold Corporation (“Barrick”). AEKL’s primary asset is a 100% participating interest in licences held by Afriore which includes an existing high-grade resource. (“West Kenya”, “Project”).
- NI-43101 compliant Inferred Mineral Resource Estimate of 1,182,000 ounces (“oz”) gold grading 12.6 g/t, believed to be one of the highest grading +1 Moz gold deposits in Africa;
- Project covers 1,161 sq km within the Lake Victoria greenstone gold field located in NW Tanzania and SW Kenya and home to Global Tier 1 assets including North Mara and Geita Gold Mine;
- Project requires in-fill drilling and technical studies prior to construction decision;
- Approximately US$55 m invested in exploration activities across West Kenya since 2010 by Acacia Mining Plc (“Acacia”) and previous owners;
- Exploration drilling of 221,000 metres, approximately 80,000 soil samples, and regional IP has identified attractive exploration targets;
- Historical gold production of approximately 259,000 oz at 12.3 g/t from Rosterman mine, included in the licence area of the West Kenya Project;
- Fully financed purchase price totalling US$7 million cash, US$7.5 million shares in Shanta Gold Limited issued to Barrick, and a two percent life of mine net smelter return (NSR) royalty over the Project; and
- Barrick to become Shanta Gold’s fifth largest shareholder with a 6.4% interest.
Benefits for Shanta Gold Shareholders
- Acquisition of one of the highest grade gold projects in Africa;
- A major presence in a geologically rich and underexplored greenstone gold region;
- Expands Shanta’s operating presence in East Africa with a diversified portfolio of exceptional assets delivering long term growth;
- An established Centre of Excellence at the New Luika Gold Mine will advance the West Kenya Project and complement the project team based in Kisumu, Kenya;
- Increases Shanta’s high-quality gold resource inventory to over 3 Moz contained gold with the prospect of future growth; and
- Complementary language and legal systems between Tanzania and Kenya based on English law.
Eric Zurrin, Chief Executive Officer, commented:
“The West Kenya acquisition is significant for Shanta Gold, creating an East African gold mining champion with realisable growth prospects and high asset quality across three attractive gold projects.
Shanta has successfully operated in East Africa for nearly 20 years and this acquisition is a natural extension in terms of geographic footprint, skillset, size and mining method.
One of Shanta’s competitive advantages is being able to operate Long Hole Open Stoping operations more efficiently than its peers which lends itself well to the advancement of the West Kenya Project.”