Asante Gold Corp. has entered into an agreement to purchase Resolute Mining Ltd.’s Bibiani gold mine in Ghana. Asante has agreed to buy all of Resolute’s interest in Bibiani through the purchase of 100% of the shares in Mensin Bibiani Pty Ltd., by paying to Resolute total cash consideration of US$90 million.
The transaction includes a US$30 million initial payment and an additional US$30 million to be paid on or before 6 months from completion, and the final US$30 million to be paid on or before 12 months from completion.
The agreement received ministerial consent, having been approved by Ghanaian Honorable Minister for Lands and Natural Resources Samuel A. Jinapor, with completion of the transaction expected 10 days after the announcement.
“The transaction is consistent with our strategic focus on our core operating assets and strengthening the balance sheet, with the initial cash receipt of US$30 million to be applied to the voluntary repayment of debt,” Resolute Managing Director and CEO Stuart Gale said.
Asante said it is dedicated to injecting the necessary capital to achieve the rapid restart of Bibiani, which is not expected to result in any immediate changes to outstanding employment or contract relationships.
Asante President and CEO Douglas MacQuarrie called Bibiani a “sleeping giant.” The mine is “essentially unmined and on care and maintenance since Ashanti Goldfields exited the project in 2006 when gold was just US$650 per oz,” he said. “Our investment strategy is to achieve near-term economic returns on this very long-life asset.”
Resolute’s Bibiani Feasibility Study Update showed 2.5 million oz (21.7 million metric tons grading 3.6 g/mt) of gold in current JORC resources and Asante said it has recognized additional exploration upside opportunities, both from near surface and underground targets.
“It is Asante’s intention, as far as is reasonably practicable, to continue building on the excellent base which Resolute has established through its recent 50,500 meters of drilling,” MacQuarrie said.
He added that Asante hopes to bring the mine back into production within the next year.
Back in April, the mining lease for Bibiani was restored by Jinapor. But this was under the caveat that the sale of Bibiani to Chifeng Jilong Gold Mining Co. would not be recognized. That sale was announced in December 2020 for total cash consideration of $105 million, but never received government approval. Resolute chose to comply with the conditions imposed by the minister.
Asante also announced it recruited a leadership team tasked with expanding the resources and fast tracking the development of the Bibiani gold mine to production. This includes COO Dave Anthony, who was COO of African Barrick Gold; Eben Swanepoel as project director, who most recently was general manager at Galiano Gold-Goldfields Nkran Mine in Ghana; Dean Bertram as executive general manager, who most recently served as managing director of Mensin Gold Bibiani Ltd.; and Paul Abbott as manager of geology, who has 50 years of international exploration and mining experience, including 30 years in West Africa, primarily in Ghana.