West African Resources (ASX:WAF) to acquire 90% of Kiaka

Highlights

  • West African Resources has entered into definitive agreements to acquire 90% of the Kiaka Gold Project.
  • West African is conducting a placement to raise up to AU$126.39 at AU$1.25 per share.
  • The placement will support the Company’s initial payments under the Kiaka Transaction, final cash payment under the previous Toega acquisition and fully repay outstanding Taurus debt facility.

Australia-based gold exploration company West African Resources (ASX:WAF) announced on Tuesday that it has entered into definitive agreements to acquire 90% of the Kiaka gold project (‘Kiaka’) from B2Gold Corp (‘B2Gold’) and their partner, GAMS.

Kiaka S.A owns Kiaka, located within the Kiaka Mining Licence, a Burkina Faso company owned 90% by B2Gold and GAMS (81% and 9%, respectively) the remaining 10% by the State of Burkina Faso. The transaction involved in the agreement include: 

US$100 million in staged cash and share payments comprising:

  1. US$55 million comprising 50% cash and 50% WAF shares, to be paid on the closing date.
  2. US$45 million in cash or WAF shares to be paid on the Deferred Consideration Payment Date;
  3. b) 3% net smelter return (‘NSR’) royalty on first 2.5 million ounces of gold produced from Kiaka;
  4. c) 0.5% NSR royalty on the next 1.5 million ounces of gold produced from Kiaka.

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Amended Toega Acquisition 

In addition, with the Kiaka Transaction, WAF has also struck a binding agreement with B2Gold and GAMS to buy their 100% interest in Kiaka Gold SARL.

Kiaka Gold SARL is an exploration company incorporated in Burkina Faso that holds the Nakomgo Exploration Permit on which the Toega Project is located (the ‘Amended Toega Agreement’).

The Amended Toega Agreement replaces the original Toega purchase agreement executed in April 2020 between the same parties that were structured to purchase assets. The parties expect the transactions to close before the end of November 2021.

Read More: Pilbara Minerals (ASX:PLS) strikes Shareholders Agreement with POSCO

Bottom Line:  

Kiaka is one of a few fully permitted gold projects in West Africa with the potential to be a long life, low strip ratio, open-pit gold mine amenable to conventional CIL processing. With the addition of Kiaka to existing operations, WAF aims to be more than 400,000ozpa gold producer by 2025.

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