Allied Gold has finalised the acquisition of the Korali-Sud small-scale mining licence and Lakanfla exploration licence, jointly known as the Diba project, in Mali from Elemental Altus Royalties.
Located 15km from Allied’s Sadiola gold mine in Western Mali, the Diba project is scheduled to start production in the first half of 2024.
As per the deal, announced in July 2023, Allied Gold acquired a 100% stake in Elemental Altus Royalties’ owned subsidiary Legend Mali (BVI) III.
In exchange, Allied made a $1m (A$1.57m) payment on closing of the transaction. The company will also make a $2m payment within 90 days of production of 100,000oz from the Diba deposit.
This will be followed by a further $1m cash payment when production reaches 150,000oz and then 200,000oz from the Diba deposit within Korali-Sud.
Legend Mali indirectly owns 100% of the Korali-Sud & Lakanfla licences.
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The deal consideration includes a 3% net smelter royalty (NSR) on the first 226,000oz of production from the Diba deposit at Korali-Sud.
Subsequently, the royalty will be reduced to a 2% NSR on production from both the Korali-Sud and Lakanfla licences.
Elemental Altus executive chairman Steven Poulton said: “We are delighted to close the sale of the strategically located Diba gold project in western Mali to Allied for cash and an uncapped royalty.
“Allied intends to fast-track Diba into production in the first half of 2024 with the typically soft oxide ores mined by open pit and trucked 15km by Allied to their CIP [carbon-in-leach] processing plant at Sadiola. Allied also intend to undertake further exploration of the project, with the objective of increasing the resource and making new discoveries.
“We expect this deal to be highly accretive for the company and contribute meaningfully to Elemental Altus’ near-term revenue growth from the initial 3% NSR on the first 226,000oz and 2% on all further ounces. In addition, Elemental Altus has received $1m in cash on closing and is entitled to receive further deferred production-based milestone payments of up to $5m.”
The Korali-Sud and Lakanfla licences are located 5km apart in Mali’s Kayes region.