- West African Resources (WAF) enters definitive agreements to acquire 90 per cent of the Kiaka gold project from B2Gold and their partner, GAMS-Mining
- The company will acquire the 90 per cent interest for US$100 million (A$133 million) in staged cash and share payments
- WAF has also announced it will be undertaking a placement and share purchase plan to raise up to $136.39 million
- The money will be used to fund the cash compontent of the acquisition and repay the syndicated finance facility with Taurus Mining Finance
- WAF enters a trading halt with shares last trading at $1.40 on October 25
West African Resources (WAF) has entered into definitive agreements to acquire 90 per cent of the Kiaka gold project from B2Gold and their partner, GAMS-Mining.
The Kiaka project lies within the Kiaka Mining Licence in Burkina Faso with 81 per cent held by B2Gold, nine per cent held by GAMS and the remaining 10 per cent by the State of Burkina Faso.
WAF will acquire a 90 per cent interest in Kiaka for US$100 million (A$133 million) in staged cash and share payments.
Broken down, US$55 million (A$73.3 million) — consisting of 50 per cent cash and 50 per cent WAF shares — will be paid on the closing date.
The remaining US$45 million (A$60 million) — in either cash or WAF shares — will be paid on the deferred consideration payment date.
A three per cent net smelter return (NSR) royalty will be paid on the first 2.5 million ounces of gold produced, while a 0.5 per cent NSR royalty will be paid on the next 1.5 million ounces produced.
WAF will now begin an updated feasibility study and will use the extensive work B2Gold has already completed.
In 2022, WAF plans to upgrade site access roads, construct camp facilities and construct community projects.
The updated feasibility work is expected to be completed by the middle of next year with major construction working beginning at the same time.
WAF has also entered a binding agreement with B2Gold and GAMS to acquire their 100 per cent interest in exploration company Kiaka Gold SARL.
Kiaka Gold holds the Nakomgo Exploration Permit, which covers the Toega Project.
This new agreement replaces the original purchase agreement executed in April 2020 and is expected to close before the end of November.
Executive Chairman Richard Hyde commented on the acquisition.
“We are very pleased to have reached a binding agreement with B2Gold and GAMS to acquire the 6.8 million ounce Kiaka gold project, and to redeploy our balance sheet and highly experienced team on such a high-quality development asset,” Mr Hyde said.
“Kiaka is one of a few fully permitted gold projects in West Africa with 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 a +400,000 ounce per annum gold producer by 2025.”
Equity raise
WAF has also announced it will be undertaking a two-phase placement to raise up to $126.39 million.
Approximately 101.11 million new shares will be issued at $1.25 each, representing a 10.4 per cent discount to WAF’s closing price of $1.40 on October 25.
WAF will also be undertaking a share purchase plan (SPP) to raise up to $10 million.
Eligible shareholders will be able to subscribe for up to $30,000 worth of shares, which will be priced the same as the placement of $1.25.
The money from both the placement and SPP will be used to fund the Kiaka Project and Toega acquisitions, and to repay the syndicated finance facility with Taurus Mining Finance.
WAF has entered a trading halt with shares last trading at $1.40 on October 25.