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- Mali Lithium (MLL) has announced it will acquire an 80 per cent interest in the Morila Gold Mine from Barrick Gold Corporation and AngloGold Ashanti
- The Morila Mine is located in southern Mali on the prolific Morila – Domba gold corridor
- Between 2000 and December last year, Morila has produced 60.6 million tonnes at 3.82g/t gold for 7.4 million contained ounces
- It has an inferred mineral resource estimate of 32 million tonnes at 1.26g/t gold for 1.30 million ounces of contained gold
- Significantly, the company says this acquisition will instantly transform Mali Lithium into a cash-generating gold producer
- While the total acquisition price isn’t final, it is estimated to cost between US$22 and US$27 million (roughly A$29.8 million to A$36.6 million)
- The parties involved are aiming for the transaction to be finalised by the end of October this year
- Company shares are grey on Monday’s open, trading for 14 cents
Mali Lithium (MLL) has signed an agreement to acquire an 80 per cent interest in the Morila Gold Mine from Barrick Gold Corporation and AngloGold Ashanti.
The Morila Mine is located in southern Mali on the major Morila – Domba gold corridor. Morila lies adjacent to Mali’s Massigui Project, where, for the last nine years, Mali has successfully explored for gold.
A number of high-value exploration targets surround the mine. Importantly, the acquisition consolidates 685 square kilometres of land in one of West Africa’s most prospective gold belts.
Production at Morila commenced in 2000 and as of December 2019, the mine produced a total of 60.6 million tonnes at 3.82g/t gold for 7.4 million contained ounces.
Mali has completed its own inferred mineral resource estimate for Morila based on prior drilling beneath the Morila main pit and it sits at 32 million tonnes at 1.26g/t gold for 1.30 million ounces of contained gold.
This estimate has been constrained within a conservative pit optimisation shell estimated using a US$1250 (roughly A$1697) per ounce gold price and above a lower cut-off grade of 0.5g/t gold.
“Morila is one of West Africa’s great gold mines and we are excited and privileged to acquire a mine of Morila’s calibre with its past production plus Mineral Resources (gold endowment) of 8.7 million ounces of gold,” Executive Chairman Dr Alistair Cowden said.
“This is truly a transformative transaction for the company as we become a gold producer,” Alistair added.
The acquisition is set to transform Mali Lithium into a cash-generating gold producer.
Morila is expected to produce approximately 26,350 ounces of gold from November this year to the second quarter of 2021.
The mine is currently producing up to 50,000 ounces recovered gold from tailings per annum, however, Mali plans to grow the production rate by recommencing open pit mining at satellite pits and Morila itself. This is expected to lead to not only a growth in production, but mine life as well.
Transaction overview
Through a binding agreement, Mali Lithium will acquire 100 per cent of the shares in Morila, which is a Jersey-registered company (Jersey Co), from Barrick and AngloGold. Jersey Co holds the AngloGold and Barrick 80 per cent interest in Morila SA.
Morila SA owns the Morila gold mine and is 40 per cent owned by Barrick, 40 per cent by AngloGold and 20 per cent by the State of Mali.
The acquisition is expected to cost between US$22 and US$27 million (roughly A$29.8 million to A$36.6 million).
The final consideration will be determined on the closing balance of tax credits in Morila SA. Morila SA hasn’t been subject to a tax audit for three years so there’s a risk there may be some liability for Morila SA after completion and when that audit is conducted.
Mali is required to pay a non-refundable deposit of US$1 million (roughly A$1.3 million) before September 20. This amount will be offset against the final acquisition price.
The acquisition will need to be approved by mining authorities and the Government of Mali. Mali Lithium will also need to secure finance for the acquisition before it is finalised.
The parties involved are aiming for the transaction to be completed by the end of October 2020.
Company shares are grey on Monday’s open, trading for 14 cents at 10:11 am AEST.
