Asante Gold has announced that the scheduled period for the closing of its acquisition of the Chirano Gold mine has been temporarily delayed pending resolutions of certain outstanding administrative matters.
Following the completion of these pending matters, the Company expects to proceed to closing of the acquisition of Chirano without changes to already agreed terms of the acquisition. However, Asante Gold did not disclose the specific details regarding the temporary delay or what caused it as well as the time frame within which these matters would be resolved.
Based on prior arrangements, the transaction was expected to be completed on or around May 31, 2022. The transaction already has the approval of the Government of Ghana, having already issued a letter of no objection to the change of control of Chirano Gold mine.
The transaction which involves a 90 per cent acquisition of Kinross’ Chirano Gold Mine goes for a total consideration of $225 million. The remaining 10 per cent is held by the government of Ghana as carried interest, as stipulated in the mining fiscal regime. Thus, this applies to the new asset ownership of Asante Gold.
The structure of the purchase involves an upfront consideration for the Chirano Acquisition comprising of $115 million in cash and $50 million in common shares of Asante.
Payment of the $50 million in Asante Gold’s common shares is based on the 30-day volume-weighted average price of the Shares prior to closing of the Chirano Acquisition. This was permitted based on the condition that“… the issuance of the Asante Shares will not result in Kinross exceeding a 9.9% share ownership in Asante.”
Kinross’ Entitlement in the Transaction
For the total transaction, Kinross is entitled to receive a deferred payment of $60 million in cash, with 50 per cent payable on the first anniversary of closing and balance payable on the second anniversary of Closing.
“If the 9.9% share ownership limit is reached, the remainder of the $50 million in share consideration will be paid by increasing the defeated cash payments in equal portions. Kinross has agreed that it will hold its Asante Shares for at least 12 months following the Closing.”
Asante Gold
The Bibiani and Chirano assets combined under one ownership will cover an entire district scale gold trend exceeding 53km in length, Douglas Macquarrie, Non-Executive Chairman of Chirano said. This is good news for Asante as it expects to be a major gold producer in the country.
“Total gold production from the mines to date exceeds 8 million ounces. With two modern process plants located 20km apart, exploration success anywhere along the gold trend can be efficiently accessed.”
Douglas Macquarrie
The transaction is a huge one. The Asante-Chirano transaction was ranked among 81 biggest deals recorded in the mining industry operations and technologies sector based on a compilation of data from GlobalData’s Financial Deals database in the last three months to April 2022.
Asante previously stated that it has plans to make its first gold pour in third quarter 2022 from its Bibiani concession. As an already producing mine, the Chirano Gold mine will push Asante gold’s production expectations up to a potential 400,000 ounces of gold in the near-term.
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