Senegal: Teranga Gold acquires Massawa mining project from Barrick Gold

Already active in Senegal with its Sabodala gold mine, Canadian Teranga Gold announced on Tuesday, December 10 that it has acquired a 90% interest in the Massawa gold project from its compatriot Barrick Gold and its Senegalese partner. A deal that should allow the buyer to realize significant synergies.

Discovered ten years ago by mining operator Randgold Resources, acquired by Barrick Gold in 2017, the Massawa site is located in the Tambacounda region, »[…] at a trucking distance from the Sabodala gold mine, Teranga’s flagship mine in Senegal, paving the way for significant investment and operating synergies, » said the Teranga Gold press release. A « proximity to projects » which should, according to the buyer, make Sabodala « a first-class facility ». For its part, Barrick Gold welcomed the fact that « the agreement with Teranga[allows] the full value of this asset to be realized[Massawa] », thus creating « a new major West African gold mining company with significant African participation ».

To carry out this major operation, which is expected to be completed in the first quarter of 2020, Teranga has not skimped on resources. In detail, $300 million – 75% of which will be obtained through a syndicated loan ($225 million) – will be paid in cash. In addition, approximately 20.7 million shares of Teranga Gold, valued at $3.85 each ($79.8 million), will be issued. At the end of the transaction, Barrick will own 11.45% of Teranga’s share capital. Finally, an additional payment of up to $50 million could be obtained, depending on the evolution of the average gold price for the three-year period following the closing of the transaction. In total, Barrick Gold – which will receive 92.5% of the total amount – and its Senegalese co-shareholder, the Compagnie sénégalaise de transports transatlantiques Afrique de l’Ouest (CSTT-AO), which will receive the remaining 7.5%, should share nearly $430 million. The Government of Senegal will remain the sole co-shareholder of the Massawa project, with a 10% stake.

The location of the Massawa and Sabodala mining projects, located in the Kanoumba permit area (in red) Source: Teranga Gold

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