Government has approved a $185-million joint venture(JV) deal between Asanko Gold Mine and Gold Fields Ghana Limited to develop a gold mine in the Ashanti region.
A statement released by Asanko Gold sighted by Citi Business News indicated that the Minister for Lands and Natural Resources, John Peter Amewu approved the deal.
The transaction, will enable Gold Fields acquire a 50% interest in the 90%-ownership of Asanko Gold Mine.
“Completion of the Transaction is now expected in early July, 2018. The final form of the joint venture agreement will be publically filed after completion. Completion now remains subject only to certain customary closing documentation and a lender’s consent from Exp T2 Ltd. (“Red Kite”), which are all expected to be in-hand in the ordinary course before the targeted completion time,” the statement said.
This means that once the deal is closed in early July, Gold Fields as a group will subscribe to a 9.9% share placement in Asanko Gold Mine Incorporation by way of a private placement of 22,354,657 Asanko shares at a price of approximately $0.79 cents.
Asanko Gold Mine, which is a Canadian company has also stated that it plans to use the money to repay in full all outstanding principal and accrued interest amounting to about $164 million, owing to its lender, Red Kite.
“Red Kite has agreed to defer the first principal repayment, approximately US$20 million, due on July 1, 2018 until August 1, 2018 to facilitate the Transaction. Asanko intends to use the cash proceeds from the Transaction to repay in full all outstanding principal and accrued interest (US$164 million) owing to Red Kite under the Definitive Senior Facilities Agreement. There are no early repayment penalties associated with the Red Kite debt,” it said.
Meanwhile, President and CEO of Asanko Gold Mine, Peter Breese, has expressed the company’s gratitude to the Minister for Lands and Natural Resources, as well as the government.
“I’d like to thank the Minister of Lands and Natural Resources for expediting approval of our Joint Venture transaction with Gold Fields and our in-country advisors, Kimathi and Partners, who have guided us through this approval process. Upon conclusion of this Transaction and repayment of the Red Kite debt facility, we will be debt-free and poised to grow our business and expand our production base,” he said.
The CEO has in the past indicated that the company intends to expand its mine life in Obuasi beyond 15 years.
Asanko is projecting an annual gold output to 460,000 ounces from 2022, spending a total of $200 million.
About Asanko Gold Inc.
Asanko’s vision is to become a mid-tier gold mining company that maximizes value for all its stakeholders.
The Company’s flagship project is the multi-million ounce Asanko Gold Mine located in Ghana, West Africa.
Asanko is managed by highly skilled and successful technical, operational and financial professionals.
The Company is strongly committed to the highest standards for environmental management, social responsibility, and health and safety for its employees and neighbouring communities.