Kinross selling Ghana mine to Asante Gold for US$225 M

Asante Gold Corp. [ASE-CSE, ASGOF-OTC, 1A9-Frankfurt] has agreed to buy Kinross Gold Corp.’s (K-TSX, KGC-NYSE) 90% interest in the Chirano Gold Mine in Ghana, West Africa for US$225 million. The Ghanaian government retains a 10% carried interest in the operation.

Chirano is an operating open-pit and underground mining operation located in southwestern Ghana, immediately south of Asante’s Bibiani Gold Mine, where the first gold production is expected by the third quarter of 2022.

Bibiani is fully permitted with available mining and processing infrastructure on-site, consisting of a 3.0 million tonne per year mill and processing plant.

Chirano was first explored and developed in 1996 and began production in October, 2005. The mine consists of the Akwaaba, Suraw, Akoti South, Akoti North, Akoti Extended, Paboase, Tano, Obra South, Obra, Sariehu and Mamnao open pits as well as the Akwaaba and Paboase underground mines

Gold equivalent production on a 100% basis was 154,668 ounces in 2021.

“We are excited to add the Chirano operation to our base of gold production in Ghana,” said Asante President and CEO Dave Anthony.

“It presents an excellent opportunity for synergy with our other Ghanian assets and represents “the next step” four our vision to build a leading gold mining company in Ghana and West Africa,” he said.

“Chirano is a well-run operation and our intention is to retain its employees, to ensure a smooth transition of ownership, with uninterrupted production.”

Under the agreement, Asante will make an up-front payment of US$115 million in cash and US$50 million worth of shares, based on the 30-day volume-weighted average price of Asante shares prior to closing of the acquisition.

The amount of shares issued will not result in Kinross owning more than 9.9% of Asante.

Kinross will also receive a deferred payment of US$60 million in cash, with 50% payable on the first anniversary of closing and the balance payable on the second anniversary of closing.

If the 9.9% share ownership limit is reached, the remainder of the US$50 million in share consideration will be paid by increasing the deferred cash payments in equal portions. Kinross has agreed that it will hold Asante shares for at least 12 months after the date of closing.

Asante shares eased 4.0% or $0.08 to $1.92 in light trading volume. The shares are currently trading in a 52-week range of $2.29 and 12.5 cents.

Kinross eased 3.3% or 23 cents to $6.72 on volume of 1.47 million. The shares trade in a 52-week range of $10.05 and $6.32.

“The Bibiani and Chirano assets will be combined under one ownership, to cover an entire district scale gold trend exceeding 53 kilometres in length and with past gold production of more than 8.0 million ounces,” said Asante Non-executive Chairman Douglas MacQuarrie.

“With two modern process plants located 20 kilometres apart, exploration success anywhere along the gold trend can be efficiently accessed.”