Toronto, Ontario: Teranga Gold Corporation (“Teranga” or the “Company”) (TSX:TGZ; OTCQX:TGCDF) has entered into a definitive agreement pursuant to which it will acquire a 90% interest in the Massawa Gold Project (“Massawa”) from a wholly-owned subsidiary of Barrick Gold Corporation (“Barrick”) (TSX:ABX; NYSE:GOLD) and its joint venture partner, Compagnie Sénégalaise de Transports Transatlantiques Afrique de l’Ouest SA (“CSTTAO”) (collectively, the “Vendors”) with the Government of Senegal holding the remaining 10% interest in Massawa (the “Transaction”).
Massawa is one of the highest-grade undeveloped open-pit gold reserves in Africa(2). It is located within trucking distance of Teranga’s flagship Sabodala Gold Mine (“Sabodala”) in Senegal, creating the opportunity for significant capital and operating synergies(3). The proximity of the projects and the combination of Sabodala’s mill and Massawa’s high-grade ore (the “Sabodala-Massawa Complex”) are expected to scale Sabodala into a top tier asset.
“The Massawa acquisition is transformational for Teranga and – by creating a top tier gold complex – the first in the country – an important milestone for the gold mining industry in Senegal,” said Richard Young, Teranga’s President and Chief Executive Officer. “We anticipate that production from the Sabodala-Massawa Complex, together with our Wahgnion Gold Mine (“Wahgnion”) in Burkina Faso, will increase Teranga’s targeted consolidated annual gold production and reposition Teranga as the next multi-asset, low-cost, mid-tier gold producer in West Africa, one of the world’s premier gold mining regions.”
Total aggregate consideration for the Transaction is $380 million upfront (the “Upfront Consideration”) plus a gold price-linked contingent payment (the “Contingent Consideration” and together with the Upfront Consideration, the “Consideration”). The Consideration will be in the form of cash and common shares of Teranga (“Teranga Shares”). See below for details on the financing of the Transaction.
