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Australian gold miner Resolute Mining has agreed to divest its Bibiani mine in Ghana to Canada’s Asante Gold in a $90m deal.

Asante will acquire all of Resolute’s stake in the Bibiani mine, through the purchase of Mensin Bibiani.

Under the agreement, Asante will initially pay $30m to Resolute followed by an additional $30m payment on or before six months from the completion of the transaction.

The Canadian firm will pay the remaining $30m on or before 12 months from the deal completion.

Located in the west of Ghana, the Bibiani underground mine is owned by Mensin Gold Bibiani Limited (MGBL), a wholly owned subsidiary of Resolute Mining. The Ghanaian Government is entitled to a 10% free carried interest in MGBL.

Asante president and CEO Douglas MacQuarrie said: “Bibiani is a sleeping giant – essentially unmined and on care and maintenance since Ashanti Goldfields exited the project in 2006 when gold was just $650 per ounce. Our investment strategy is to achieve near-term economic returns on this very long-life asset.

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“Resolute has reported in their Bibiani Feasibility Study Update 5Moz (21.7 million tonnes grading 3.6g/t) of gold in current JORC resources and Asante has recognised additional exploration upside opportunities, both from near-surface and underground targets.”

The sale is part of Resolute’s efforts to focus on core operating assets and boost its balance sheet.

Resolute plans to use the initial cash receipt of $30m to repay debt.

The transaction, which has been approved by Ghana’s Minister of Lands and Natural Resources, is planned to complete in the next ten days.

The deal follows the termination of Resolute Mining’s mining lease for the Bibiani Gold Mine by the Ghanaian Government in March 2021.

As a result, China’s Chifeng Jilong Gold Mining cancelled a deal to acquire the mine. The firm cited it had not received timely information about the mining lease termination.