SENEGAL had waived a pre-emptive right over 25% in the Massawa Gold Project and agreed to the incorporation of the project into Sabodala, the nearby gold mining property owned by Teranga Gold Corporation.
These agreements were key approvals ahead of Teranga Gold’s purchase of a 90% stake in Massawa from Barrick Gold – a $430m cash and shares transaction unveiled in December, the company said in a statement on February 13.
“Barrick and Teranga expect to satisfy the remaining conditions precedent to closing of the Transaction in the coming weeks, which include the granting by the Government of Senegal of an exploitation license and a residual exploration license for Massawa,” Teranga said.
Closure of the transaction was expected in the first quarter of 2020. The deal consideration consists of $380m which comprises some 20.7 million shares in Teranga shares at a price of $3,85/share – equal to about 12% of the firm’s share capital – and a cash payment for the $300m balance.
Teranga has infrastructure and processing facilities about 25 kilometres from Massawa. In addition, the combination of Teranga’s orebody with that of the Massawa prospect, and the geological prospectivity, would add “further benefits”, said Mark Bristow, CEO of Barrick Gold at the time of deal announcement last year.
Richard Young, president and CEO of the Toronto-listed firm said in December his company would spend about $30m establishing access to Massawa. Teranga expected to report gold production of between 215,000 and 230,000 ounces from Sabodala for 2019.