West African Resources will acquire the entire Nakomgo exploration permit, which includes the Toega gold deposit
Australian mining company West African Resources has signed an agreement with Canada’s B2Gold and GAMS-Mining F&I (GAMS) to acquire the Toega gold deposit in Burkina Faso, for $45m.
Situated on the Nakomgo exploration permit, which is 90% owned by B2Gold and 10% by GAMS-Mining F&I, the Toega deposit has an existing estimated inferred resource of about 1.1 million ounces, grading 2.1 g/t gold.
Under the terms of the deal, West African Resources will acquire the entire Nakomgo exploration permit by making staged payments.
West African executive chairman Richard Hyde said: “We are excited to have reached this agreement to acquire the neighbouring Toega deposit from B2Gold and GAMS. Toega is expected to increase Sanbrado’s production profile and mine life.
“We intend to kick off drilling and feasibility studies in the near future, with the aim of bringing Toega ore into the Sanbrado mine plan within three years.”
West African to use existing reserves to make $10m cash payment
West African Resources is planning to make the first $10m cash payment from existing reserves and a further $10m in either cash or shares on the completion of a feasibility study and prior to the second year of signing the agreement.
This would result in the transfer of Nakomgo exploration permit ownership to West African Resources.
A further $25m in production payments will also be made by the firm based on a 3% net smelter returns royalty on production from the Nakomgo exploration permit area.
In March 2020, West African Resources has announced the first gold pour at its Sanbrado project in Burkina Faso, West Africa.
The company said it has completed construction and commissioning activities in all areas, passing three million working hours, and the first smelt exercise at the mine delivered gold bars weighing 23.9kg.