Resolute Mining, listed on the ASX and LSE, has announced that it has signed a binding agreement with Toro Gold Limited which will see Resolute acquiring all Toro’s shares. The deal is valued at US$274 million and gives Resolute immediate control of Toro, effective from 2 August 2019.
Toro’s flagship asset is the low-cost, high-margin Mako gold mine in Senegal, which entered production in January 2018. In 2018, Mako produced 156 926 oz of gold at an All-In Sustaining Cost (AISC) of US$655/oz.
The processing plant of the Mako gold mine.
The addition of Mako expands Resolute’s existing portfolio comprising the Syama gold mine in Mali, the Bibiani gold mine in Ghana and the Ravenswood gold mine in Australia. Mako will expand Resolute’s production base, strengthen operational cashflow, increase revenues to which shareholder dividends are linked, and provides a strong platform for further growth. Resolute has revised its FY19 (to 31 December 2019) production and cost guidance to 400 000oz of gold at an AISC of US$960/oz which includes production from Mako from acquisition.
“The Mako gold mine is a high quality, strongly cashflow generative producing asset which complements our existing portfolio of large-scale, long-life mines,” commented Resolute’s MD and CEO, John Welborn. “The Toro Gold team discovered the Mako orebody in 2010 and have successfully developed a high-value gold mine. We are delighted to combine our businesses. Senegal is an attractive investment jurisdiction for mining, and we look forward to working closely with the Government of Senegal, our 10 % partner at Mako, to maximise the value within Toro Gold’s portfolio.
“Resolute has produced over eight million ounces of gold from nine mines over the last 30 years. The Mako gold mine will be our tenth operating mine and one which forms an important part of our next phase of growth. The acquisition also confirms our commitment to creating a leading African gold producer. Mako’s additional low-cost gold production provides a solid growth foundation that will enable us to deliver compelling value for our shareholders.”
Toro Gold Chief Executive Officer and Founder, Martin Horgan, said he was pleased to be combining Toro Gold with Resolute. “Resolute’s acquisition of Toro Gold provides Toro Gold shareholders with the unique opportunity of realising immediate value for their Toro Gold shareholding in the form of partial cash consideration while becoming part of a premier African gold producer as shareholders of Resolute. The contribution of our world-class Mako gold mine to Resolute’s high quality portfolio of large scale, long life assets creates a compelling African gold investment proposition under the stewardship of an excellent and proven management team which will further maximise value for shareholders.”
Mako is a conventional truck-and-shovel open-pit mining operation. It has consistently delivered recoveries of around 95 % with processing completed via a carbon-in-leach plant comprising a crushing circuit, an 8,5 MW SAG mill and a gold extraction circuit. Electricity is provided by a 14 MW diesel-fuelled IPP power station and water is extracted from the Gambia River. Current infrastructure (tailings impoundment, raw water dam and power station) has the capacity to meet increases in ore reserves and an expansion of the milling rate to 2,3 Mt/a without the need for additional capital expenditure.
Mako hosts a mineral resource of 1,22 Moz (1,89 g/t Au) as at 30 October 2018, and an ore reserve of 928 koz (2,05 g/t Au) as at 31 December 2018.
Toro’s exploration at Mako is focused on both identified targets within the mine permit and on the potential to delineate regional satellite deposits that are within trucking distance of the mill. The company’s exploration package covers over 2 800 km2 of the highly prospective Birimian terranes of Senegal, Côte d’Ivoire and Guinea.