Newcrest to sell gold operation for $81m

The Bonikro site

Australian gold miner Newcrest Mining is set to sell its majority stake in the Bonikro gold operation in Côte d’Ivoire, West Africa to a consortium for $81 million.

Newcrest acquired an 89.89 per cent interest in Bonikro through its merger with Lihir Gold in 2010. The Bonikro mine produced 36,846 ounces of gold in the September 2017 quarter and has guidance of between 130,000-155,000 ounces for the 2018 financial year.

The gold miner has agreed to offload its share in the mine to a consortium that includes F&M Gold Resources and Africa Finance Corporation.

The two-part deal will see Newcrest receive $72 million in cash, part of which relies on the successful progression of the Akissi-so pit extension at Bonikro.

Newcrest will also hold a net smelter royalty on future ore mined at the Bonikro lease worth an estimated $9 million.

Sandeep Biswas, Newcrest managing director, said the deal resulted from an extensive review of the Bonikro operation, which was launched in August.

“The outcome delivers value for Newcrest shareholders and provides a clear future path for the Bonikro mine for the benefit of its employees, the community and all our Côte d’Ivoire stakeholders,” Biswas said.

The royalty applies to the first 560,000 ounces of production from the next pushback of the Bonikro pit at a rate of 2.5 per cent for gold prices above $US1251 an ounce. The royalty will increase by 0.5 per cent for every $US50 increase in the gold price up to 4.5 per cent at $US1450 an ounce or above.

Newcrest will still retain its exploration tenements in Côte d’Ivoire outside of the Bonikro / Hiré area, including the Seguela project where drilling is under way at the Antenna prospect to confirm the extent of discovered mineralisation, once the deal has been completed.

The miner expects to finalise the Bonikro transaction in the March 2018 quarter.

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