Once completed, it will take the total consideration paid for Orca to C$215 million ($168.44m), which includes the C$17 million cash Perseus previously paid.
As per the share exchange ratio, Orca Gold’s shareholders will own a nearly 9.1% stake in the enlarged Perseus Mining after the closing of the deal.
Orca Gold’s main asset is the Block 14 gold project in northern Sudan, in which it has a 70% stake. The asset is expected to produce 228,000 ounces of gold annually for the first seven years of a 13.5 life of mine.
Proven and probable reserves of Block 14 stand at about 2.85 million ounces at an assumed gold price of $1,350/oz.
The company also has a 31.4% stake in Canada-based Montage Gold, which owns the Koné Gold Project in Côte d’Ivoire.
“This important transaction not only brings credibility to Sudan as a mining jurisdiction to invest in, but also provides Orca shareholders an avenue to continue realising the value of Block 14 and the successes of Montage,” Orca Gold president and CEO Richard Clark said in the statement.
Africa’s gold rush
Northern Sudan has attracted hundreds of thousands of artisanal miners in the alst decade, which Clark describes as the largest gold rush ever seen in Africa. The country produces 100 tonnes of gold a year, making it one of the largest in the continent.
Perseus’s move expands and consolidates its presence in West Africa, where it currently operates three gold mines — Edikan in Ghana, and Sissingué and Yaouré in Côte d’Ivoire.
Once the acquisition of Orca is finalized, the Australian miner will have three operating mines currently producing gold at a rate of approximately 500,000 ounces per year and a high-quality development project that has the potential to ensure that Perseus maintains or exceeds its targeted production level well into the next decade.
“With the objective of operating four mines, Perseus will be well advanced towards fulfilling its aim of becoming a highly profitable, well managed, pan-African gold company that consistently creates benefits for all stakeholders,” Perseus Mining managing director and CEO Jeff Quartermaine noted.
The deal, expected to close in early June 2022, is subject to Orca Gold’s security holders’ approval, court approval, regulatory approvals, and other customary conditions.
