Predictive Discovery (ASX, TSX: PDI), a gold producer in West Africa, is taking a 12% stake in Awalé Resources (TSXV: ARIC), increasing its exposure to exploration in Côte d’Ivoire.
The investment is $14.2 million (US$10.1 million), PDI said on Wednesday. The company is attracted to Awalé’s Odienné project, Predictive CEO Matthew Wilcox said in a release.
Odienné comprises 2,346 sq. km across seven exploration permits in Côte d’Ivoire’s north. It hosts 32.4 million tonnes grading 1.33 grams gold per tonne and 0.33% copper for 1.39 million oz. gold and 93,000 tonnes copper, according to a first resource issued in May. The joint venture with a subsidiary of Newmont (TSX: NGT; NYSE: NEM), the world’s largest gold miner, plans a preliminary economic assessment this year and a prefeasibility study by the fourth quarter of 2027.
“Awalé’s management team has done an outstanding job of advancing the Odienné project to a point where it is showing real potential as a future gold mine of significance,” Wilcox said.
Predictive joins mid-tier gold producer Fortuna Mining (TSX: FVI; NYSE: FSM) with 13% in Awalé and Newmont at 8.2%.
Post-merger
The investment marks another step in Predictive’s strategy of building a larger West African gold producer following its merger with Robex Resources that closed in April. It broadens the company’s pipeline beyond its producing Kiniéro mine in Guinea and Nampala mine in Mali. And it adds ties to one of the region’s emerging gold-copper discoveries while strengthening its presence near the company’s main Bankan project in Guinea.
Shares in both Predictive and Awalé fell on Thursday. Awalé declined 5.9% to 80¢ each for a $95.1-million market capitalization after a 9% gain a day earlier. It’s had a 52-week swing between 48¢ and $1.18. Predictive lost 7.7% to 60¢ apiece in Toronto, valuing the company at $3.14 billion. It’s ranged from 59¢ to $1.16 over the past year.
In the deal, Predictive will subscribe for 16.6 million common shares of Awalé at a price of 85¢ each. It’s a binding subscription agreement.
The companies will also enter an investor rights agreement allowing Predictive to maintain its ownership through future financings and giving it access to certain project information. They will also establish a joint technical advisory committee.
The investment is expected to close in late July, subject to regulatory approvals.
-With files from David Cassels
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