UK-based Trident Royalties has signed an agreement with a group of sellers to acquire a 50% stake in a 2% net smelter royalty in western Mali's Dandoko gold project permit area.
B2Gold owns the Dandoko project, which is located 25km from its operating Fekola Mill, one of the company’s largest assets with a targeted production of 580koz-610koz at $565/oz-$625/oz cash cost for this financial year.
According to B2Gold, Dandoko has similar metallurgical characteristics of mineralisation to Fekola and will be amenable to processing at the latter.
Last year, Fekola produced nearly 600koz of gold, contributing to more than 50% of the company’s 1.03 million ounces of gold production.
B2Gold completed a study confirming the potential for near-term production by transporting saprolite material to Fekola. The company claims to have allocated $79m for phase one saprolite mining from the Anaconda and Dandoko areas.
Dandoko was originally a flagship asset of Oklo Resources, which was acquired by B2Gold last September for A$91.3m ($58.49m).
According to the agreement, Trident agreed to pay $3m in cash and issue $750,000 in its shares to the sellers. Additionally, it will pay $1.25m in cash upon the first royalty receipt and $1.25m in cash on receipt of payment on 500,000oz of gold sold from the royalty area.
Trident CEO Adam Davidson said: “The acquisition of the Dandoko royalty again demonstrates Trident's ability to identify undervalued royalties covering high-quality assets and delivering significant shareholder value.
“Dandoko is a highly attractive royalty on an asset operated by a senior producer, close to existing processing infrastructure, with a demonstrated pathway to production and significant exploration upside.
“The potential for near-term production, alongside the conservative structure of the transaction, which defers 40% of the consideration until meaningful milestones are achieved at the project, provides a compelling exposure for Trident.”
The transaction is subject to receiving consent from B2Gold’s subsidiary Africa Mining SARL, which holds the Dandoko licence.
