AMN - SENEGAL: Teranga completes Massawa acquisition

Teranga Gold Corporation has completed the acquisition of a 90% interest in the Massawa Gold Project from a wholly-owned subsidiary of Barrick Gold Corporation and its joint venture partner, Compagnie Senegalaise de Transports Transatlantiques Afrique de lâ Ouest SA (CSTTAO). The Government of Senegal holds the remaining 10%.

With the receipt of Massawa's exploitation licence and residual exploration licence, as well as formal consent to integrate Massawa into Teranga's existing Senegalese gold operation, all of the closing conditions for the transaction are now satisfied.

The upfront consideration totalled $380 million and consisted of approximately $300 million in cash and an aggregate of approximately $80 million in Teranga shares issued to Barrick and CSTTAO. 

In respect of the share component, around 19.2 million Teranga shares were issued to Barrick and about 1.6 million Teranga shares to CSTTAO.

Teranga's president and CEO Richard Young said: "Now that the transaction is complete, we are turning our focus to integrating the high-grade Massawa deposits into our mine plan and leveraging our existing infrastructure at Sabodala.

"The combination of the two assets results in significant capital and operating synergies and creates a top-tier gold complex.

"The Massawa acquisition is transformational and, when combined with our recently commissioned Wahgnion gold mine, repositions Teranga as a low-cost mid-tier gold producer.

"Congratulations to the Teranga and Barrick teams, as well as our lender, Taurus, and all of our financial and legal advisors on this achievement. As well, special thanks to the Government of Senegal for its support of our continued growth in Senegal," he concluded.

Concurrent with the completion of the transaction, Teranga also closed financing transactions:

• $225 million acquisition facility agreement entered into with Teranga's existing lender, Taurus Funds Management Pty Ltd and Barrick as lenders, $200 million of which was lent by Taurus, with the remaining $25 million provided by Barrick;

• $106 million bought deal offering of 27,451,000 subscription receipts of Teranga (since exchanged for Teranga shares); and

• $45 million private placement of 11,677,942 Teranga shares with Tablo Corporation, in connection with the exercise of its pro-rata pre-emptive rights.

A portion of the proceeds of the financing transactions was used to fund the cash portion of purchase price of the acquisition, with the balance of proceeds being used for exploration drilling across Teranga's portfolio, transaction-related costs and for working capital purposes.

www.terangagold.com