Canadian-based Kinross Gold has agreed to divest its 90% interest in the Chirano mine in Ghana to Asante Gold in a $225m cash-stock deal.

The remaining 10% stake in the operating gold mine is owned by the Ghanaian Government.

Upon completion of the deal, Kinross will receive $115m in cash, as well as $50m worth of Asante common shares but not exceeding a 9.9% stake in Asante.

Kinross will also receive a deferred payment of $60m. Of this amount, half will be payable on the first anniversary of the deal closing while the remaining will be payable on the second anniversary.

The deal is planned for completion by the end of next month.

A letter of no objection has also been issued by the Ghanian government relating to the change of control of the Chirano mine.

Asante Gold president and CEO Dave Anthony said: “We are excited to add the Chirano operation to our base of gold production in Ghana. It presents an excellent opportunity for synergy with our other Ghanaian assets and represents ‘the next step’ for our vision to build a leading gold mining company in Ghana and West Africa.

“Asante has deep ties to Ghana and is committed to sharing the benefits of its activities with the local community and Ghana. Chirano is a well-run operation and our intention is to retain its employees, to ensure a smooth transition of ownership, with uninterrupted production.”

Located in southwestern Ghana, the Chirano open-pit and underground operation is situated approximately 100km south-west of Kumasi.

Ore from the mine is processed at the mine’s mill, which has a capacity of nearly 3.5Mtpa.

The mine, which started production in 2005, is situated immediately south of Asante Gold’s Bibiani gold mine.