Australia’s Resolute Mining (ASX:RSG) said Wednesday it would buy West Africa-focused junior miner Toro Gold in a cash and stock deal worth $274 million, adding to the list of mergers and acquisitions the bullion sector has seen this year.
Resolute, which has two gold mines in Africa — Syama in Mali and Bibiani in Ghana — will pay $130 million in cash plus 142.5 million of its own shares for the smaller rival.
The gold market has been undergoing a wave of consolidation on the back of strong prices for the yellow metal.
The Perth-based company hopes that
Toro’s Mako mine in Senegal will complement its own operations in West Africa
an take its full year 2019 gold production to 400,000 ounces.
“The contribution of our highly profitable Mako gold mine and prospective exploration portfolio with Resolute Mining’s portfolio of large scale, long life assets creates a compelling African gold investment proposition,” Toro’s chief executive, Martin Horgan, said in the statement.
The London-based junior gold miner started
production from the Mako project in Senegal in 2018, eight years after
discovery, with a total 157,000 ounces mined. It has been further exploring in
Senegal, Ivory Coast and Guinea.
Resolute said that 94% of Toro Gold’s
shareholders have committed to accept the takeover offer, enabling the company to
take immediate control on August 2.
The gold market has been undergoing
a wave of consolidation on the back of strong prices for the yellow metal,
which has rallied from just above $1,300 per ounce in early January to $1,445
per ounce on Wednesday.