Syama gold mine. (Image courtesy of Resolute Mining.)
Australia’s Resolute Mining (ASX, LON: RSG) has struck an earn-in agreement with African Gold (ASX: A1G) that would allow it to earn up to an 80% interest in the junior’s Syama shear zone project, in the south of Mali.
Resolute, which was a gold miner in the home country for about 30 years before gravitating towards West Africa, could become the project’s majority owner by spending $500,000 on exploration over the next two years. It would also need to start a feasibility study within five years and complete it within eight.
If Resolute decides to mine the asset, African Gold can elect to contribute to the development of the project to maintain its equity or dilute to a 1.5% net smelter royalty.
The Western Australia-based miner already has a major operation in the area, comprising the Syama underground mine, the Tabakoroni open pit and several satellite oxide pits.
Resolute Mining chief executive Terry Holohan has been trying for years to prove Barrick’s CEO Mark Bristow wrong. As the leader of Randgold Resources, which merged with the Canadian gold miner in 2018, Bristow decided against developing the gold resource at Syama into a mining operation.
He said at the time that the project, located 300km (217 miles) southeast of the capital Bamako and about 30km (21 miles) from the border with Côte d’Ivoire, was technically too difficult to mine.
“We thought we could crack the metallurgy,” Holohan, who took over as CEO in May, told The African Report. “We’ve now ticked the box.”
The executive added he was looking forward to updating Bristow on the project’s progress.
“That conversation will happen,” he said.
Resolute Mining inks deal to earn up to 80% of African Gold project in Mali
African Gold’s Syama project location in relation to Resolute’s Syama mining complex. (Courtesy of African Gold. Click to expand)
African Gold managing director Phillip Gallagher said Resolute was the “natural partner” to develop the Syama shear zone project as it is contiguous to Resolute’s Syama gold mine.
“The agreement allows African Gold to maintain a meaningful interest in the Syama project with the option to participate in the future development of the project, if it chooses to do so,” Gallagher said in the statement.
African Gold will now focus its efforts on its flagship Didievi gold project in Cote d’Ivoire and its Senegal-Mali shear zone projects in northern Mali, Africa’s third-largest gold producer.
The country is home to industrial mines operated by companies including Barrick Gold, B2GOLD, AngloGold Ashanti and Hummingbird Resources.