Subiaco-based Mali Lithium is set to become a gold producer after announcing it will buy out Barrick Gold and AngloGold Ashanti’s stake in a West African mine.
Barrick and AngloGold both hold a 40 per cent stake in the Morila goldmine in Mali, while the nation’s government holds the remaining 20 per cent.
Mali Litihum intends to buy an 80 per cent interest in Morila – representing 685 square kilometres of tenure – for an estimated $US22-27 million ($A30-36.6 million), if it secures financing to complete the transaction, and with no objection from the Mali government.
The 32 million-tonne open pit is forecast to produce 26,350 ounces of gold between November this year and the second quarter of fiscal 2021.
In that time, Mali expects the goldmine to generate around $US17 million ($A24 million) in cashflow.
The company also said there was potential for near-term growth in production and mine life, with a new mineral resource and mine plan currently being prepared.
Executive chairman Alistair Cowden said the transaction was transformative for the business.
“We have a unique advantage as the newest gold producer on the ASX as Morila has all the infrastructure required of an operating remote goldmine, as well as the expertise of the operating team,” he said.
“We will benefit from the substantial sunk capital investment by the previous owners over the last twenty years.
“We plan to use the cashflow from the current tailings retreatment at Morila to ramp up the operations through recommencing open pit mining as soon as practicable.”
The Morila mine currently produces 50,000oz of recovered gold from tailings annually.
It is adjacent to Mali Lithium’s Massigui project, where the company has been exploring for gold over the past nine years.
Mali shares have surged on the news, up 28.5 per cent at 11:42am AEST to trade at 18 cents each.