Gold rush in Kenya’s western belt hots up
A Canada based gold trader with over 160 royalties, streams and precious metal offtakes in North America has bought stake in Kenya’s Western belt gold mines and Burkina Faso for roughly Kes1.3 billion.
Osisko Gold Royalties announced that it has concluded a transaction with Barrick TZ Limited, a subsidiary of Barrick Gold Corporation to acquire the following royalties for total cash consideration of $11,750,000.
The billion-shilling deal gives the North American firm a two per cent royalty on the AfriOre and Gold Rim licenses comprising the West Kenya project operated by British firm Shanta Gold.
The company will also get a one per cent royalty on the Frontier project operated by Metalor SA, a private company; and one per cent NSR royalty on the Central Houndé project operated by Thor Explorations Ltd according to US Securities Exchange Commission filings.
“We are pleased to add, to our portfolio, royalties on prospective projects that are multiple-hundreds of square kilometers in size,” Sandeep Singh, President and CEO of Osisko said.
“West Kenya, the most advanced asset, comprises a district-scale 1,162km2 land package which already contains a robust initial high-grade resource with a potential long life, low cost, high return project,” he said.
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The Canadians join British firm Shanta Gold which has been developing a high-grade gold project located in the Lake Victoria gold field in western Kenya.
Shanta Gold published a scoping study in October 2020 that outlined a nine-year mine life producing approximately 3000 kilos of gold per year from an inferred resource base of 2.9 million tonnes grading 12.6 g/t for 33,400 kilos of gold.
The project is currently envisaged as a combined open pit and underground operation focused on the Isulu and Bushiangala deposits in the northwest corner of the 1,162km2 land package.
Shanta Gold is currently infill drilling to advance the project to prefeasibility and, subject to a positive investment decision, anticipates initial production in 2025.
Drilling results have yielded numerous high-grade intervals including 4 meters grading 706.3 g/t gold and 6 meters grading 219.5 g/t gold.
In addition to the existing resource, Shanta Gold has identified multiple drill prospects within the broader district.
“Recent drill results, which rank amongst the best in the sector, highlight the high grade nature of the deposit and its growth potential. The project is an important growth asset for Shanta Gold, a company with an operating mine in the region and the ability to fast-track towards production,” Sandeep Singh said.
There is a gold rush in the Western Kenya belt that is set to see the first company list at the Nairobi Securities Exchange and the London Securities Exchange in a deal worth Kes2.1 billion by British firm Mayflower Gold.
Early this year, Migori gold mines went up for sale for Kes742 million exchanging hands between two British firms.
Mayflower Gold was buying the Kilimapesa Gold pits in Migori from London-listed firm Goldplat, gaining an entry into the Kenyan market.
However, behind the scenes, Mayflower was executing a complex deal in which it will be acquired by another London-listed company, Papillon Holdings, where they will buy 100 per cent of the new Migori miner in a reverse takeover deal.
A reverse takeover is where the target is larger than the bidder with the result that the target shareholders become majority shareholders in the bidder, hence Mayflower will have greater stake.
The merged firms will also buy a 70 per cent stake in a joint venture interest in Congo Gold SARL for interests in the Kakamoeka gold project.
After stacking the gold bars of this transactions, Mayflower has announced it will cross list in Kenya’s Nairobi Securities Exchange (NSE), giving Kenyans a chance to own a stake in the gold company.
