Teranga Gold Corporation (TSX:TGZ; OTCQX:TGCDF) has entered into a definitive agreement to acquire a 90% interest in the Massawa Gold Project in Senegal, Africa.
Teranga’s President and Chief Executive Officer, Richard Young, said Massawa is one of the highest-grade undeveloped open-pit gold reserves in Africa and is a strategic addition to the company’s growing African gold position.
Mr Young highlighted Massawa’s location within trucking distance of Teranga’s flagship Sabodala Gold Mine in Senegal, creating the opportunity for significant capital and operating synergies.
“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,” Mr Young said.
“We anticipate that production from the Sabodala- Massawa Complex, together with our Wahgnion Gold Mine 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,” he added.
Teranga will acquire its 90% interest for C$380 million upfront plus a gold price-linked contingent payment.
The deal with a wholly-owned subsidiary of Barrick Gold Corporation will see partner with the Government of Senegal, which will hold the remaining 10% interest in Massawa.
Interestingly, Barrick will ultimately become one of Teranga’s largest shareholders after the deal is completed, holding approximately 11.45% of Teranga Shares.
Massawa’s historical mineral reserves base currently stands at 2.6Moz from 20.9Mt at 3.94 g/t Au – making it one of the highest-grade undeveloped open-pit gold reserves in Africa. This is expected to augment Sabodala’s mineral reserves base of 2.4Moz from 55.7Mt at 1.35 g/t Au.
Mr Young said ultimately the acquisition and anticipated higher production and lower costs will enable Teranga to transform into a mid-tier producer with higher annual production and reduced per ounce costs.