Burkina Faso : Avesoro Resources acquires Youga and Balogo gold mines

TSX and AIM listed Avesoro Resources Inc is on the cusp of consolidating its robust gold portfolio with the acquisition of two gold mines, Youga and Balogo, in centre-south region of Burkina Faso : for a total consideration of 69.5 million $ in share and cash.

The West Africa focused gold producer on 31 October said it entered into a conditional agreement to that effect with Avesoro Jersey Ltd that already has majority holding of 73.5% of Avesoro Resources. It will occur through the acquisition of the entire issued share capital of MNG Gold Burkina SARL, Cayman Burkina Mines Ltd., MNG Gold Exploration Ltd., AAA Exploration Burkina Ltd. and Jersey Netiana Mining Ltd. and their subsidiaries.

Commenting on the acquisition of the two mines, Serhan Umurhan, CEO of Avesoro, said : “The assets will provide Avesoro with geographic diversity within West Africa”. They are “highly complementary to our existing New Liberty mine, significantly increasing Avesoro’s gold production, in addition to adding high quality exploration upside that will provide for further future organic growth”, he added. Umurhan explained that in conjunction with the turnaround at New Liberty gold project in Liberia, the “acquisition marks a significant next step in achieving our long-term plan to become a premier mid-tier African gold producer.”

In fact, Youga and Balogo are forecast to add a combined 110 000 ounces of gold to the proforma production of Avesoro Resources profile in 2017. Besides, they will induce approximately 60% increasing forecast gold production for 2018, as the two mines will bring combined 86 000 ounces of gold to the company’s production profile in 2018.

On 31 October, Avesoro Resources conditionally raised approximately 20.0 million US$ through a placing of new common shares to new and existing sophisticated and accredited investors. It will utilize 18.5 million $ from the proceeds to fund the 18.5 million $ cash component of the acquisition consideration. The remainder will be used for general working capital purposes.

It is worth recalling, Avesoro Jersey purchased the Youga gold mine and Ouaré permit for 25.3 million US$ in February 2016 from Endeavour Mining. As at 30 June 2017, it had invested 25 million $ , principally, in new mining equipment and drilling campaigns. A year earlier, in April 2015, Avesoro Jersey purchased the Balogo permit for approximately 8 million $ from Golden Rim Resources Ltd and as at 30 June had invested 13 million $ in drilling programmes to delineate mineral reserves and resources, feasibility studies and heavy mining equipment.