Endeavour Mining has agreed to divest its 85% stake in its non-core Agbaou gold mine in Côte d’Ivoire to Africa-focused gold company Allied Gold in a deal worth up to $80m.
As per the terms of the deal, Endeavour will be entitled to a consideration comprising $20m in cash, $40m worth shares in Allied Gold, and a contingent payment of up to $20m.
The contingent payment will consist of $5m for each quarter of this year where the average gold price is more than $1,900 per ounce.
Allied Gold, which is the owner of the nearby Bonikro mine, will combine its operations with that of the Agbaou mine, post-acquisition.
The subsequent Bonikro-Agbaou operation will be made up of multiple open pits, two processing plants with a total milling capacity of more than 5 metric tonnes per annum (Mtpa) to potentially produce more than 285,000 ounces per year.
Endeavour Mining president and CEO Sébastien de Montessus said: “The sale of our interest in the Agbaou mine to Allied Gold is in line with our strategy of actively managing our portfolio to focus management efforts on high margin, long-life core assets.
“Agbaou has been a highly cash generative asset which facilitated the organic development of Houndé and Ity, and given that it has now become non-core to Endeavour, we firmly believe that this transaction is in the best interests of all of Agbaou’s stakeholders, including the Government of Cote d’Ivoire, local communities and the employees themselves.
“This transaction will ensure mining activities can continue for many years to come through the creation of the Bonikro-Agbaou complex.”
Agbaou gold mine life to cease by end 2022
Located nearly 200km north of the port city of Abidjan, the Agbaou gold mine is an open pit mining operation, which began commercial production in 2014. In the first nine months of 2020, the gold mine yielded 76,713 ounces of gold.
The mine life of the asset is expected to cease by the end of next year. However, Allied Gold will look to extend the life of mine by undertaking continued regional exploration work in the near term.
The other stakeholders in the Agbaou gold mine are the Côte d’Ivoire government (10%) and SODEMI (5%), which is Côte d’Ivoire’s state company for mining development.
The deal is expected to be closed in late March 2021.
