African Barrick Gold (ABG) has proposed to buy up the outstanding share capital of Aviva Mining (Kenya), its first expansion outside Tanzania.
ABG currently has four producing mines, all located in north-west Tanzania, and is hoping that this acquisition could add a number of licenses in neighbouring West Kenya.
However, despite the optimistic outlook for the new sites by the company, its shares fell 3.28% to 365.04p in early trading on Monday morning, in line with the wider mining sector as Eurozone concerns fuelled risk aversion.
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The purchase, subject to the approval of Aviva's shareholders (which will be sought at a general meeting in late August/early September), is for an initial cash consideration of A$20m (around £13m).
"This acquisition represents the first step in expanding our footprint outside of Tanzania and building our future growth pipeline," said ABG's Chief Executive Officer Greg Hawkins.
"The acquisition is an attractive entry into an under explored and highly prospective land package in a country bordering our existing operations. Whilst Kenya is a relatively new mining destination, it has a solid transport infrastructure, a stable government and ABG already has an established supply chain in country."
Through the acquisition, ABG will buy Aviva's 51% interest in a joint venture with fellow miner Lonmin and a right to earn up to a 75% interest in a second joint venture with Advance Gold Corporation.
BC
