The primary asset is the West Kenya project, which has a resource currently pegged at just under 1.2mln ounces. The grade is a handsome 12.6 grams per tonne, and the project is believed to be the highest grade million ounce-plus project under development anywhere in Africa.
Shanta will pay US$7mln in cash for the assets, US$7.5mln in shares, and a 2% royalty will stay with Barrick.
Barrick will become Shanta Gold’s fifth largest shareholder with a 6.4% interest.
“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,” said Shanta chief executive Eric Zurrin.
“Shanta has successfully operated in East Africa for nearly 20 years and this acquisition is a natural extension in terms of geographic footprint, skillset, size and mining method. One of Shanta’s competitive advantages is being able to operate long hole open stoping operations more efficiently than its peers which lends itself well to the advancement of the West Kenya project.”
The shares ticked up in early trade on Monday to just over 11p, and are now closing in on a three-year high