Shanta Gold completes acquisition of Barrick's Kenya gold projects
Shanta Gold, East Africa-focused gold producer, has completed the acquisition of 100% shares of Barrick’s subsidiary Acacia Exploration Kenya (AEKL) from three subsidiaries of Barrick Gold.
With the receipt of regulatory approvals in Kenya, including standard consents from the Mining Authorities to the assignment of interests and the transfer of Prospecting Licences, and approval of the Transaction by the Competition Authority of Kenya, all of the closing conditions for the Transaction are now satisfied.
The purchase consideration is comprised of $7.0 million cash (inclusive of $0.5 million which may become payable post completion subject to satisfaction of a condition subsequent), $7.5 million shares in Shanta Gold issued to Barrick issued at 10.5% per share, and a two percent life of mine net smelter return (NSR) royalty over the Project. Accordingly, 54,650,211 shares in Shanta Gold have today been issued to Barrick resulting in a pro forma interest of 6.4% in Shanta Gold.
Eric Zurrin, Chief Executive Officer, commented: “The West Kenya acquisition is significant for Shanta Gold, creating an East African gold mining champion with realisable growth prospects and high asset quality across three attractive gold projects. Now that the Transaction is complete, we are turning our focus to integrating West Kenya into the Shanta portfolio and accelerating progress on the ground with plans to begin infill drilling and to further delineate the resource potential. We are committed to responsibly investing in Kenya and working with the Government, communities and local stakeholders.”
Pursuant to the terms of the acquisition, Shanta has also inherited certain liabilities of AEKL and the consideration has been adjusted to reflect certain working capital items, the net impact of which is an additional cash sum payable by Shanta to settle third party liabilities of $1.3 million. The cash component of the consideration has been adjusted down by $0.5 million which may become payable within 4 years subject to completion of a condition subsequent.