OreCorp Tanzania has received approval of the Tanzanian Fair Competition Commission (FCC) to increase its stake in Nyanzaga Mining Company (NMCL), which holds a 100% interest in the Nyanzaga gold project, to 51%.
OreCorp Tanzania signed an earn-in agreement with Acacia Mining over the project in September 2015.
In July this year, the company completed the earn-in phase by investing around $14m towards a pre-feasibility study and related work.
In addition, OreCorp Tanzania elected to buy a further 26% stake in the project by paying $3m to Acacia and the approval of the FCC has been granted now in this regard.
However, the transaction is still conditional on the approval of the Mining Commission and the payment of $3m to the Acacia Group.
Simultaneously, OreCorp signed a completion agreement in order to allow OreCorp Tanzania to increase its ownership of the Nyanzaga project to 100%.
The completion of the transaction is subject to certain conditions including the receipt of the Tanzanian regulatory approvals, and obtaining the Special Mining Licence (SML) for the project.
Furthermore, OreCorp Tanzania is required to make an additional payment of $7m to clinch the deal.
Once the company becomes a 100% owner of the project, Acacia will have a net smelter return (NSR) royalty over production from the project, capped at $15m.
In a statement, Acacia Mining said: “Both OreCorp and Acacia believe that a simplified ownership structure of NMCL is beneficial to the future development of the project and would enable it to be best placed to provide significant benefits to Tanzania and all stakeholders.”
Nyanzaga is estimated to contain mineral resource of 3.1 million ounces at 4g/t gold.
Acacia’s operating mines in Tanzania include North Mara, Bulyanhulu and Buzwagi.