Resolute Mining has secured a binding agreement to acquire 27 per cent of Canadian exploration company Loncor Resources, known for its gold prospects in the Democratic Republic of Congo (DRC).
The deal represents an ambitious expansion for Resolute’s business beyond its current active or in-development projects in Mali and Ghana.
Following completion of the deal, Resolute will own 51 million new common shares of Loncor via a $C2.6 million ($2.65 million) share placement and 25 million existing Loncor shares in exchange for $C2.5 million in Resolute shares.
Toronto Stock Exchange-listed Loncor holds exclusive gold rights to a 2087 square kilometre area located in the highly prospective Nyagu Archaean belt, which hosts gold deposits such as Geita, North Mara and Bulyanhulu.
Other major operators in the region apart from Resolute — which operated the Golden Pride gold mine from 1998 to 2014, producing 2.2 million ounces (Moz) of gold — include AngloGold Ashanti and Randgold Resources, joint operators of the Kibali gold project.
Resolute’s current flagship project in Africa is the Syama underground project in Mali, West Africa, which was commissioned in 2009. Its most notable current Australian project is the Ravenswood gold mine in Queensland.
Resolute managing director and chief executive officer John Welborn commented on the investment as part of Resolute’s broader strategy for Africa, stating that he was convinced the greenstone belts would host future mines.
“Resolute is establishing a strategic position by acquiring interests in successful explorers with large holdings,” he said.
“Ultimately our ambition is to participate in the development of a major new gold mining district consistent with Resolute’s Golden Pride legacy as a successful pioneer of the gold mining industry in East Africa.”