Mali Lithium becomes gold producer with +$US20m Barrick Gold-AngloGold mine buy
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Mali Lithium (ASX:MLL) has increased its exposure to gold with the acquisition of an 80 per cent interest in the Morila gold mine in southwest Mali from Barrick Gold and AngloGold Ashanti for $US22-27m ($29.9-$36.6m).
The Morila deal will instantly transform Mali Lithium into a cash-generating gold producer, with the mine forecast to produce 26,350oz of gold from November 2020 through to Q2 2021.
Shares in Mali Lithium advanced nearly 36 per cent on the news in Monday early trade to an intra-day high of 19c. Junior gold miners have been a favourite of investors in recent weeks thanks to the continued strong price.
The Morila mine is forecast to generate $US17m ($24m) of aftertax cashflow between November and Q2 2021, assuming a gold price of $US1,850/oz, the company said.
“We have a unique advantage as the newest gold producer on the ASX, as Morila has all the infrastructure required of an operating remote gold mine as well as the expertise of the operating team,” executive chairman Alistair Cowden said.
Cowden said the transformative transaction for Morila meant the company would benefit from the substantial investment of its two previous owners over the past 20 years.
The processing plant has a replacement cost of $US265m, and is the only such facility for 200km.
Morila is an operating mine that has produced more than 7.4 million ounces of gold from open pit mining and stockpile processing over 20 years of Barrick and AngloGold ownership.
The state of Mali owns the remaining 20 per cent of Morila, which has a 4.5-million-tonne-per-annum processing plant and a resource of 32 million tonnes at 1.26 grams per tonne (g/t) for 1.3 million ounces of gold.
Mali Lithium is preparing to update the resources for the mine and satellite deposits.
The company said it is reviewing the future of its Goulamina lithium project, acquired in 2016, which has a 109-million-tonne resource at 1.45 per cent lithium, for which a definitive feasibility study will be completed in September.
“We will soon complete the definitive feasibility study for Goulamina and then we will undertake a strategic review to investigate the optimum path to maximise the value of Goulamina for shareholders,” Cowden said.
Thomson Resources (ASX:TMZ), meanwhile, will acquire the Hortons gold tenement in northern NSW, which has potential for intrusion-related gold system mineralisation, from private company Syndicate Minerals.
To settle the deal, Thomson will transfer 5.7 million of its shares to Syndicate Minerals and has agreed to pay a net smelter royalty of 1 to 2 per cent on any gold mined from the tenement.
Covering 58sqkm, the Hortons gold tenement located 30km from Tenterfield has a number of historic gold targets and some historic drilling that included a hit of 27.5m at 7.5g/t gold.
“The Hortons gold project acquisition represents a further building up of a quality Australian focused gold portfolio able to be worked all year round,” chairman David Williams said.
Previous exploration results indicate a high grade ~6g/t gold shoot containing the bulk of gold mineralisation, and this has not been adequately tested down plunge, the company said.
Thomson owns the Harry Smith and Yalgogrin gold projects in the Lachlan Fold Belt of NSW.
Rumble will pay $1m in shares to Mt Magnet Gold for the project, which hosts the 35km-long and 3km-wide Warda Warra north-south trending mineralised greenstone belt.
Rumble has started a multi-rig drilling program of 12,000m focusing on multiple high-grade gold shoot targets at the Western Queen Central deposit, which produced 660,000 tonnes at 8.9g/t gold for 189,500oz.
Meanwhile, gold was trading slightly higher at $US1,972 an ounce on Monday, after Goldseek.com reported that the $US16bn Ohio Police and Fire Pension Fund in the US approved a 5 per cent allocation to gold to diversity its portfolio and hedge inflation risk.