African Minerals Founder Strikes Deal to Buy Marampa Mine from London Mining
African Minerals (LON:AMI) founder and chairman, Frank Timis, is one step closer to securing a deal to purchase London Mining’s (LON:LOND) Marampa iron ore mine in Sierra Leone.
The founder’s private company, Timis Mining Corp, is said to have secured $20 million in financial backing from Australia’s Cape Lambert Resources to acquire the mine, which toppled into administration last week after failing to find a buyer.
Funding for the acquisition will take the form of a 12-month $8 million loan and a $12 million royalty purchase, which gives Cape Lambert $2 for each ton of iron concentrate sold by the mine. The funding package is contingent upon Timis Mining securing the assets from the administrator.
Marampa, which employs around 1,300 people, is expected to produce approximately five million to seven million tons of iron ore a year. At this rate, the annual royalty for Cape Lambert is $10 million to $14 million or as much as $56 million over the term of the deal.
As London Mining’s only operating mine, Marampa reported a first-half loss due to slumping iron ore prices and the worst Ebola outbreak in history for Sierra Leone. The mine slipped into administration last week after it ran out of funds and failed to secure a buyer for the company.
The acquisition makes sense for African Minerals. The company’s Tonkolili project in Sierra Leone is about 120 kilometers from Marampa and is expected to enter into a joint venture with the mine.
According to Investec analysts, African Minerals seemed to be the natural acquirer for the Marampa mine, given its significant infrastructure in the region.
"... It is interesting that it is Timis' private company purportedly doing the bidding, perhaps because it can more readily realize the funding to make the offer.”
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.