African Barrick Gold will purchase all of the outstanding share capital of Aviva Mining for a total consideration of A$20m ($20.5m).
The company will earn Aviva Mining’s 51% interest in a joint venture with platinum producer Lonmin, which, through its subsidiary AfriOre International, owns a 49% stake in two special licenses SL123 Ndori and SL213 Siaya located in West Kenya.
African Barrick Gold will also acquire Aviva Mining’s right to earn up to a 75% interest in a second joint venture with Advance Gold Corporation.
The JV’s principal assets are SL265 Bukura, SL266 Sigalagala and SL267 Rosterman in West Kenya.
Following the acquisition, the terms of both the JV agreements will remain unchanged.
African Barrick Gold CEO Greg Hawkins said the acquisition is the company’s first step in expanding its global footprint outside of Tanzania.
"The acquisition is an attractive entry into an underexplored and highly prospective land package in a country bordering our existing operations," said Hawkins.
"Whilst Kenya is a relatively new mining destination, it has a solid transport infrastructure, a stable government and ABG already has an established supply chain in the country."
African Barrick Gold will make an additional cash payment of A$10m ($10.29m) to Aviva if the company declares a National Instrument 43-101 (NI 43-101) compliant indicated resource of 3 million ounces of gold on the properties.
The transaction is subject to approval from the Kenyan Competition Authority and Aviva’s shareholders.
Image: Aviva Mining holds mineral interests in a number of licenses in West Kenya. Image: Aviva Mining.