Dar es Salaam — Acacia Mining plc has signed a binding conditional agreement with its partner, Sarama Resources Ltd, to terminate the earn-in agreement in respect of the South Hounde Project in south-western Burkina Faso.
From the statement issued by the company on the Dar es Salaam Stock Exchange (DSE) where the company is listed on November 28, 2018, it stated that the termination of the earning agreement was conditional on definitive documentation being agreed by the parties before April 30, 2019.
"Acacia's divestment of South Hounde fits with the company's strategy of divesting certain non-core assets as part of an ongoing review of its exploration portfolio," noted the report.
The statement further explains that the agreement will allow Sarama to move to 100 per cent ownership of the project by making a payment of $2 million in staged payments.
Acacia will also receive $2 million once commercial production commences and retain an improved net smelter return royalty (NSR) of one to two per cent, based on a sliding rate basis on gold price received and a capped gold production of 1Moz Au.
In addition, Acacia will be granted 5 million warrants for common shares in Sarama, exercisable for five years.
Acacia remains committed to exploration in Burkina Faso with various earn-in agreements still active and which provide exposure to approximately 2,000 km² of the prospective Houndé Belt.
Acacia is the UK holding company and Tanzania's largest gold miner and one of the largest producers of gold in Africa. The Acacia Group has three mines in Tanzania; Bulyanhulu, Buzwagi and North Mara.
The company is also listed in the London Stock Exchange with a secondary listing on the Dar es Salaam Stock Exchange.