Avesoro Resources taking on two mines in Burkina Faso

Avesoro Resources has entered into a conditional agreement to acquire the Youga Gold Mine and Balogo Gold Mine in Burkina Faso, it announced on Tuesday, through the acquisition of the entire issued share capital of MNG Gold Burkina, Cayman Burkina Mines, MNG Gold Exploration, AAA Exploration Burkina and Jersey Netiana Mining and their subsidiaries from Avesoro Jersey.

The AIM-traded firm confirmed Avesoro Jersey is a related party to itself, being its majority shareholder with a 73.5% holing, with total consideration for the transaction of $69.5m.

It confirmed it has conditionally raised approximately £15.2m through a placing of new common shares to new and existing sophisticated and accredited investors at a placing price of 1.9p per share.

Of the proceeds from the placing, $18.5m will be used to fund the cash component of the acquisition consideration, and the remainder will be used for general working capital purposes.

Up to a further $2.5m may be raised for working capital purposes by way of a broker option as determined by the brokers, which will remain open for exercise by the brokers until 1700 GMT on Tuesday.

Avesoro’s board said the $69.5m acquisition consideration was to be funded through $51.0m of common shares issued to Avesoro Jersey as well as the $18.5m of cash raised via the placing.

It described the transaction as a “transformational acquisition” for the company, which would add two producing mines to its portfolio.

“I am delighted to announce that we have entered into an agreement with Avesoro Jersey to acquire the Youga Gold Mine and Balogo Gold Mine in Burkina Faso,” said chief executive Serhan Umurhan.

“The Assets will provide Avesoro with geographic diversity within West Africa and are highly complementary to our existing New Liberty mine, significantly increasing Avesoro's gold production, in addition to adding high quality exploration upside that will provide for further future organic growth.

“In conjunction with the turnaround at New Liberty, this acquisition marks a significant next step in achieving our long-term plan to become a premier mid-tier African gold producer.”