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(Alliance News) - Australia's Resolute Mining Ltd on Wednesday announced the USD270 million acquisition of Senegal-focused Toro Gold Ltd.
Resolute is to pay USD274 million for Toro, with USD130 million of that being in cash and the rest via the issue of 142.5 million Resolute shares to Toro.
Toro's flagship asset is the Mako gold mine in Senegal, which produced 156,926 ounces of gold in 2018. The deal adds Mako to Resolute's existing portfolio made up of Mali's Syama mine, Ravenswood in Australia, and Bibiani in Ghana.
Adding Mako, Resolute now sees producing 400,000 ounces of gold in 2019. On Tuesday, it had upped guidance for the year to 330,000 ounces from 300,000 ounces.
Resolute said ICM Ltd, Toro's largest shareholder, is "strongly supportive" of the deal, and so far, 94% of Toro shareholders have said they will accept the deal.
Resolute Chief Executive John Welborn said: "The Mako gold mine is a high quality, strongly cashflow generative producing asset which complements our existing portfolio of large-scale, long-life mines. The Toro Gold team discovered the Mako orebody in 2010 and have successfully developed a high value gold mine.
"We are delighted to combine our businesses. Senegal is an attractive investment jurisdiction for mining, and we look forward to working closely with the government of Senegal, our 10% partner at Mako, to maximise the value within Toro Gold's portfolio."
"Resolute has produced over eight million ounces of gold from nine mines over the last 30 years. The Mako gold mine will be our tenth operating mine and one which forms an important part of our next phase of growth. The acquisition also confirms our commitment to creating a leading African gold producer. Mako's additional low-cost gold production provides a solid growth foundation that will enable us to deliver compelling value for our shareholders."
Resolute shares were untraded in London on Wednesday morning, last quoted at 98.50 pence each.