In an effort to increase its gold production in Africa, Ashanti Goldfields has announced plans to acquire Toronto-listed International Gold Resources (IGR).
IGR’s principal asset is the right to acquire, from the Ghanaian government, a 45% operating interest in the past-producing Bibiani gold mine in Ghana.
A feasibility study indicates Bibiani has reserves of 19.7 million tonnes grading 2.76 grams gold per tonne. In addition, there is an inferred reserve of 4.9 million tonnes grading 2.71 grams and an indicated tailings resource of 4.3 million tonnes grading 1.16 grams. The study concluded that current resources could support production for more than six years and top 300,000 oz. in the first year of operation. IGR also holds interests in gold exploration projects in Ghana, Burkina Faso and the western U.S.
An agreement signed by the companies will see IGR shareholders receive 0.175 of an Ashanti Global Depository Security (GDS) and 90 cents for each IGR share held. Based on the March 29 closing price of the New York-listed GDS, each IGR share is worth $6.85. On a fully diluted basis, the offer has a value of $136 million.
The deal is the second African acquisition for Ashanti in the past year. The company also acquired Cluff Resources and now holds a controlling interest in the Ayanfuri mine in Ghana and the Freda Rebecca operations in Zimbabwe. The mines produced a total of 140,000 oz. in 1995.
Once the transaction receives necessary approvals, IGR will be amalgamated with a wholly owned subsidiary of Ashanti.
Near the town of Obuasi, in Ghana, Ashanti owns and operates one of the world’s oldest, largest and richest gold mines. In production for the past 100 years, the mine last year produced more than 930,000 oz. Proven and probable reserves there, as of Sept. 30, 1995, stood at 21 million oz.
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