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Newcrest to Sell Séguéla Gold Asset to Roxgold for US$30 Million
Feb. 12, 2019 02:55PM PST
Along with Séguéla, Roxgold will receive an accompanying portfolio of regional exploration tenements in Côte d’Ivoire.
Newcrest Mining (ASX:NCM) has entered an agreement to sell its Séguéla gold project to Roxgold (TSX:ROXG,OTCMKTS:ROGFF) for US$30 million.
The sale will see Roxgold pay US$20 million in cash upfront upon completion of the agreement, along with a deferred US$10-million payment in cash upon first gold production. Along with the Séguéla project itself, Roxgold will receive an accompanying portfolio of regional exploration tenements in Côte d’Ivoire.
While completion is subject to conditions such as approval from the mines minister of Côte d’Ivoire and Séguéla’s exploration permit being renewed, the deal is expected to be finalized during the June quarter.
“Following a strategic review we are pleased to announce the sale of the Séguéla project to Roxgold. This outcome delivers value for Newcrest shareholders and provides what we believe to be the best way to maximise the potential of the asset for the benefit of our local employees, communities and Côte d’Ivoire,” Newcrest Managing Director and CEO Sandeep Biswas said in a statement.
The portfolio being acquired by Roxgold consists of 11 exploration permits, including Séguéla, that span almost 3,300 square kilometers. According to Roxgold, approximately $21 million has been invested into exploration on the tenements thus far, with around 117,000 meters of drilling completed.
Séguéla is at the advanced exploration stage, and Roxgold says it has near-term development potential as it hosts the Antenna gold deposit. Discovered by Newcrest in 2016, it hosts a mineral resource of 5.8 million tonnes at 2.3 grams per tonne gold for 430,000 ounces of gold in the inferred category.
“Roxgold is excited to acquire Séguéla and the related permits from Newcrest. This acquisition represents a meaningful addition to our growth pipeline, providing a key second asset, immediate additional resource upside and a large prospective land package all in an accretive transaction for Roxgold shareholders,” commented Roxgold President and CEO John Dorward.
Roxgold’s other primary asset is its Yaramoko gold project in Burkina Faso, whose land package spans 230 square kilometers on the Houndé Belt. The asset has two major gold deposits, 55 Zone and Bagassi South. 55 Zone is an underground mine that is currently in production, and Bagassi South is in development and is expected to see commercial production in 2019’s second quarter.
Newcrest’s share price was up 1.37 percent at the end of ASX trading on Tuesday (February 12), closing at AU$25.08. Meanwhile, Roxgold shares were down 1.16 percent on the TSX at 3:10 p.m. EST, coming in at C$0.85 apiece.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.
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