Twiga Minerals, a joint venture between Barrick and the Tanzanian government, announced on Tuesday that Bulyanhulu Gold, a subsidiary of Barrick, had obtained a new prospecting license in Tanzania.
Bulyanhulu has reached binding agreements on the acquisition with Barrick Gold (NYSE: GOLD) (TSX: ABX), Tembo Gold and Mineral Industry Promotion and Consulting Company Limited, a wholly owned subsidiary of Tembo.
Bulyanhulu will acquire a 100% interest in six prospecting licenses located near the Bulyanhulu mine from MIPCCL and is likely to add significant mineral reserves to Barrick's asset base in Tanzania, the company said in a statement.
The statement said that the consideration payable by Bulyanhulu is US $6 million, plus certain other contingent payments, which will be calculated based on the inferred, instructed and measured gold mineral resources determined by Barrick on the land covered by the license.
Bulyanhulu is required to invest at least US $9 million in the license area over a four-year period and agrees to subscribe for 5518764 shares of Tembo common stock at a price of C $0.27 per share in a non-brokerage private placement. It is expected to be completed in the first quarter of 2022.
A "long hunting" trip in Tanzania
Mark Bristow, Barrick's chief executive, said the acquisition was an "important step" in the company's strategy to increase its investment in new growth opportunities in Tanzania.
Barrick's North Mara mine in the country is on track to meet production targets for 2021 and is replacing depleted reserves with brownfield exploration.
The company reported last month that Bulyanhulu production acceleration was gaining momentum, with the plant performing better than expected and the recovery rate stable at 93 per cent.
In January last year, Barrick signed an agreement with Tanzania under which the government would take stakes in three gold mines, ending a long-running tax dispute and setting a template for negotiations with other companies.
