Fortuna boosts West Africa presence with Chesser deal
Fortuna Silver Mines Inc. [FVI-TSX, Lima; FSM-NYSE; F4S-FSE] said it has completed the acquisition of Chesser Resources Ltd. in a move that strengthens its presence in West Africa.
The announcement follows the inauguration ceremony at Fortuna’s Seguela mine in Cote d’Ivoire on September 15, 2023. The company said Seguela poured its first gold on May 24, 2023 and the processing plant has not produced 21,716 ounces of gold in dore as of the end of August. Annual production there is forecast at between 60,000 and 75,000 ounces.
Fortuna has acquired 100% of the fully paid ordinary shares of Chesser in exchange for 0.0248 of a common share of Fortuna for each Chesser share held. On closing, Fortuna issued 15.5 million Fortuna shares in the transaction, representing 5.1% of the company’s resulting issued and outstanding shares.
The transaction will be implemented by way of a scheme of arrangement and is valued at A$0.1421 for each Chesser share or $80.6 million.
The acquisition of Chesser expands Fortuna’s asset base to include the preliminary economic assessment-stage Diamba Sud gold project in Senegal, one of the new and emerging gold discoveries in the region.
Chesser holds tenements covering approximately 872-square kilometres of prospective ground located in close proximity to and sharing similar geological features with tier one gold mines owned by Barrick Gold Corp. [ABX-TSX, GOLD-NYSE] and B2Gold Corp. [BTO-TSX, BTG-NYSE], located in Mali.
Fortuna Silver Mines is a Canadian company with five operating mines in Argentina, Burkina Faso, Mexico and Peru, and Cote d’Ivoire.
News that the deal has closed was released after the close of trading on September 20, 2023, when Fortuna shares closed at $3.95. The shares are currently trading in a 52-week range of $5.61 and $2.82.
“In a short time, Chesser has done a great job advancing Diamba Sud from early-stage exploration to a PEA-stage project with multiple targets yet to be tested,’’ Fortuna President and CEO Jorge Ganoza has said.
Diamba Sud consists of four open pitable high-grade gold deposits, along with numerous targets yet to be tested. Fortuna said it will prioritize exploration to expand the mineral resource before advancing Diamba Sud to development stage.
Diamba Sud is estimated to host an indicated mineral resource of 10 million tonnes o of average grade 1.9 g/t gold containing 625,000 ounces. On top of that is an inferred resource of 4.7 million tonnes of average grade 1.5 g/t gold, containing 235,000 ounces. These resources are distributed across the Area D, Area A, Karakara and Bouganda deposits. Fortuna said potential exploration opportunities exist, including the new discovery at Western Splay which warrants additional exploration.