28th Nov 2018 08:36
LONDON (Alliance News) - Acacia Mining PLC said Wednesday it had terminated an earn-in agreement with Toronto-listed Sarama Resources Ltd related to a Burkina Faso gold mine as it looks to focus on core projects.
Acacia and Sarama had originally agreed a deal which could have seen Acacia earn up to a 70% stake in the South Hounde project after funding USD14 million of exploration costs over a four year period. It could also have acquired a further 5% interest.
By cancelling the earn-in deal, Sarama will be able to move to a 100% ownership of the project. In order to do so, Saram would have to make staged payments amounting to USD2.0 million.
Acacia will also receive USD2.0 million once commercial production begins and its retains a net smelter return royalty of 1% to 2%. Acacia will also be granted five million share warrants in Sarama which will be exercisable for five years.
The earn-in termination is expected to be finalised at the end of April 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," Acacia explained in a statement.
"Acacia remains committed to exploration in Burkina Faso with various earn-in agreements still active and which provide exposure to approximately 2,000 square kilometres of the prospective Hounde Belt," the firm added.
Shares in Acacia were 1.1% lower at 179.30 pence on Wednesday.
Related Shares:
ACA.L