WEST African Resources aimed to become a 400,000 ounce a year gold producer by 2025 following the acquisition of the Kiaka gold project from B2Gold, the Toronto-listed gold producer, and its partner, GAMS Mining F&I, a fund.
The project, located in West Africa’s Burkina Faso, contains 6.8 million ounces in mineral resources and has a free-milling metallurgy supporting conventional carbon-in-leach recovery technology, the company said.
A feasibility study undertaken by B2Gold targeted a six to eight million tons a year of ore processing rate.
Works construction is expected to begin in the first quarter of next year including camp, access road and community projects. Major works are forecast to begin in mid-2022. There were “significant synergies” with Sanbrado, West African Resources’ existing operation in Burkina Faso, the company said. Kiaka is situated about 45km from Toega.
As part of the purchase price, West African Resources has also agreed to pay a 2.7% net smelter return royalty (NSR) on the first 2.5 million oz of gold produced at the project followed by a 0.45% NSR royalty interest on the following 1.5 million oz in gold production.
In order to make initial cash payments agreed in the purchase price, West African Resources is to undertake two share placements in an effort to raise A$126m. Shares will be placed at A$1.25 per share. The company is currently trading at A$1.40/share.
“We are very pleased to have reached a binding agreement with B2Gold and GAMS … and to redeploy our balance sheet and highly experienced team on such a high‐quality development asset,” said Richard Hyde, executive chairman of West African Resources. “With the addition of Kiaka to existing operations, West African Resources aims to a be a +400,000 oz gold producer by 2025.”
West African Resources previously agreed to buy the Toega gold deposit from B2Gold and GAMS-Mining F&I for $45m in April 2020. The agreement announced this week sees an update to that transaction in that B2Gold will sell Kiaka Gold which owns the Toega project. Previously the Toega project was a sale of assets.