Twiga Minerals, a joint venture between Barrick and the Government of Tanzania, announced on Tuesday the acquisition of new prospecting licences in Tanzania by Bulyanhulu Gold Mine Limited, a subsidiary of Barrick.
Bulyanhulu has entered into a binding agreement with Barrick Gold (NYSE: GOLD)(TSX: ABX), Tembo Gold Corp, and the Mineral Industry Promotion and Consulting Company Limited, a wholly-owned subsidiary of Tembo, for the acquisition.
Bulyanhulu will acquire from MIPCCL a 100% interest in six prospecting licences located in areas adjacent to the Bulyanhulu mine and have the potential to add significant mineral reserves to Barrick’s asset base in Tanzania, the company said in the statement.
The consideration payable by Bulyanhulu is $6 million plus certain other contingent payments that will be calculated based on the inferred, indicated and measured gold mineral resources identified in the areas of land which are covered by the licences using Barrick standards for determining mineral resources, it said.
Bulyanhulu is required to invest a minimum of $9 million in the licence area over the course of the four years and has agreed to subscribe for, on a non-brokered private placement basis, 5,518,764 of common shares of Tembo for C$0.27 each. Closing is expected to occur in the first quarter of 2022.
Barrick chief executive Mark Bristow said the acquisition a “significant step” for the company’s strategy of increasing its investment in new growth opportunities in Tanzania.
Barrick’s North Mara mine in the country is on track to achieve 2021 production targets and to replace depleted reserves through brownfields exploration.
The company reported last month the production ramp-up at Bulyanhulu is gaining momentum with plant performance ahead of expectations and recoveries at a consistent rate of 93%.
In January last year, Barrick signed a deal with Tanzania for the government to take stakes in three gold mines, ending a long-running tax dispute and setting a template for negotiations with other firms.