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Feature image credit: Wikimedia

AIM-listed East Africa-focused gold producer Shanta Gold has entered into a definitive agreement to purchase 100% of the shares of Barrick’s subsidiary Acacia Exploration Kenya, or AEKL, from two subsidiaries of Barrick Gold Corporation.

AEKL’s primary asset is a 100% participating interest in licences held by Afriore, which includes an existing high-grade resource.

If the deal is approved, Barrick will become Shanta Gold’s fifth largest shareholder with a 6.4% interest in the company. Shanta will acquire the West Kenya project at a fully financed purchase price totalling US$7 million cash, $7.5 million shares in Shanta Gold issued to Barrick, and a 2% life of mine net smelter return (NSR) royalty over the project.

The West Kenya project covers 1 161 km2, within the Lake Victoria greenstone gold field located in NW Tanzania and SW Kenya and home to Global Tier 1 assets including the North Mara and Geita gold mines.

The project has an NI-43101 compliant inferred mineral resource estimate of 1.1 Moz of gold grading 12.6 g/t, believed to be one of the highest grading +1 Moz gold deposits in Africa.

READ MORE: Shanta Gold reveals best exploration results to date at New Luika

While the project still requires in-fill drilling and technical studies prior to construction decision,approximately US$55 million has been invested in exploration activities across the project since 2010 by Acacia Mining and previous owners, where 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 was mined from Rosterman mine – which is included in the licence area of the West Kenya project.

Through the acquisition of the West Kenya project, which is one of the highest grade gold projects in Africa, Shanta will have a major presence in a geologically rich and underexplored greenstone gold region.

The project will also expand Shanta’s operating presence in East Africa with a diversified portfolio of exceptional assets delivering long term growth and will icrease Shanta’s high-quality gold resource inventory to over 3 Moz contained gold with the prospect of future 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.

READ MORE: Shanta Gold updates finance plans for Singida

“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,” says Shanta Gold CEO Eric Zurrin.

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,” Zurrin concludes.

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Barrick
On 1 January 2019 a new Barrick was born out of the merger between Barrick Gold Corporation and Randgold Resources. Shares in the new company trade on the NYSE (GOLD) and the TSX (ABX). The merger has created a sector-leading gold company which owns five of the industry’s Top 10 Tier One gold assets (Cortez and Goldstrike in Nevada, USA (100%); Kibali in DRC (45%); Loulo-Gounkoto in Mali (80%); and Pueblo Viejo in Dominican Republic (60%)) and two with the potential to become Tier One gold assets (Goldrush/Fourmile (100%) and Turquoise Ridge (75%), both in the USA). With mining operations and projects in 15 countries, including Argentina, Australia, Canada, Chile, Côte d’Ivoire, DRC, Dominican Republic, Mali, Papua New Guinea, Peru, Saudi Arabia, Senegal, USA, and Zambia, Barrick has the lowest total cash cost position among its senior gold peers and a diversified asset portfolio positioned for growth in many of the world’s most prolific gold districts.