Under the terms of the agreement, both the companies will own 50% stake each in the joint venture that is expected to have a market capitalization of $700m.
Keegan president and CEO Peter Breese said that the merger would be an opportunity to combine two adjacent projects with combined cash of $340m to fund a mid-tier scale production growth profile expected to start by 2014.
"We expect significant synergies through the joint development of Obotan and Esaase which we expect will ultimately create one of the largest gold mining and exploration districts in Africa," added Breese.
The merger consolidates Asankrangwa gold belt comprising over 70km of belt strike anchored by the Obotan and Esaase deposits and about 1,000km2 in Ghana.
