BARRICK COMPLETES MASSAWA GOLD MINE TRANSACTION

Toronto, CANADA 

In line with its strategy of focusing on Tier One assets, Barrick Gold Corporation has completed the recently announced transaction of combining its Massawa gold project in Senegal with Teranga Gold Corporation’s Sabodala gold mine.  

The gold giant company and its Senegalese partner held a 90% interest in the Massawa project.  

Massawa, one of the highest-grade undeveloped open-pit gold reserves in West Africa, is located only 20 km away from Teranga’s flagship Sabodala mine.As part of the transaction Barrick and its partner will receive an up-front payment valued at $380 million at the time of announcement, comprised of 20,718,273 Teranga common shares (with a value of $3.85 per share).

According to the information made available to press, a cash payment of approximately $300 million, and a contingent payment of up to $50 million which is based upon the average gold price for the three-year period immediately following closing (“three year average gold price”).  

The contingent payment, which is payable three years following closing, is $25 million if the three year average gold price is greater than $1,450 and less than $1,500 per ounce; $35 million if the three year average gold price is greater than $1,500 and less than $1,600 per ounce; and $50 million if the three year average gold price exceeds $1,600 per ounce.   

Barrick President and Chief Executive, Mark Bristow said that Massawa was one of the largest unexploited gold deposits in West Africa and its legacy company Randgold Resources had developed this over a period of years to the point where its value could now be optimally realized for the benefit of all its stakeholders which includes the Senegal Government.

“Teranga is best placed to achieve this as it already owns the nearby Sabodala mine and Sabodala’s combination with Massawa is expected to deliver significant synergies." Bristow said, adding that Barrick will participate in the upside of the combined asset through the 11% interest it is acquiring in Teranga through this transaction,” he said.

Teranga, which kicked off operations at its $240 million Wahgnion mine in southern Burkina Faso this year, expects to produce between 300,000-350,000 ounces in 2020 and generate more than $100 million of free cash flow at a $1,250 gold price.

The acquisition of Massawa will likely make the company revise its target, leaving it closer to its five-year goal of being a 500,000 ounce-a-year gold miner.- Africa