UK-based Endeavour Mining has closed the divestment of its 90% stake in its non-core Karma mine in Burkina Faso to Néré Mining in a deal worth up to $25m.
Before the deal closure, Néré Mining paid $10m to Endeavour in the form of a reimbursement of historical shareholder loans.
Besides, Néré Mining will make $5m in deferred cash payment six months after the closing of the transaction.
A contingent payment of up to $10m will also be payable by Néré Mining to Endeavour by 12 months after closing. This will be based on a sliding scale, linked to the average spot gold price.
Furthermore, Endeavour will receive a 2.5% net smelter return (NSR) royalty on the project, on all ounces produced more than 160koz of recovered gold, effective 1 January 2022.
Endeavour president and CEO Sébastien de Montessus said: “The sale of our non-core Karma mine to Néré Mining is in line with our strategy of actively managing our portfolio to focus management efforts on high margin, long-life and low all-in sustaining cost, core assets.
“A key consideration in the sale process was the selection of a party that will maintain our trusted partnerships in Burkina Faso, by committing to operate the mine in the best interests of our employees and local stakeholders.”
The State of Burkina Faso owns the remaining 10% stake in the Karma low-grade heap leach operation, which comprise several shallow, low strip ratio, free-dig open-pit gold deposits.
Based in Burkina Faso, Néré Mining is a consortium led by Elie Ouedraogo, who is a board member of Karma and director of Semafo Burkina Faso.
Semafo Burkina Faso is a subsidiary of Endeavour Mining.
Last year, investment company La Mancha closed its $200m investment in Endeavour Mining.