Ashanti Gold Corp. (TSX-V: AGZ) and Desert Gold Ventures Inc. (TSX-V: DAU) are pleased to announce they have entered into a binding letter of intent contemplating the acquisition by Desert Gold of all of the outstanding common shares of Ashanti . The Proposed Transaction, upon completion, will allow Ashanti shareholders to benefit from a consolidation of land positions currently under property rights or owned by both Desert Gold and Ashanti on adjacent properties in a prospective area of Mali.
Under the terms of the LOI, all of the issued and outstanding Ashanti Shares will be exchanged on the basis of 0.2857 Desert Gold common shares for each Ashanti Share. The Exchange Ratio implies consideration of approximately CAD $0.0514 per Ashanti Share, based on the closing price of the Desert Gold Shares on the Toronto Venture Stock Exchange on March 8, 2019. This represents a premium of 28.5% based on the closing price of Ashanti Shares on the TSXV on March 8, 2019. The Proposed Transaction value is approximately CAD $3.8 million on a fully diluted in-the-money basis, and Ashanti shareholders will own 31% of the combined entity. The parties have until April 15, 2019 to enter into a definitive agreement and have set a long-stop date of September 30, 2019 to close the Proposed Transaction.
Tim McCutcheon, Ashanti’s CEO, commented – This transaction is an exciting opportunity for Ashanti shareholders to be a part of a bigger land package that encompasses both major geological structures in the area. Larger scale in an area of multiple gold mineralization zones lowers risk and raises the attractiveness of the combined land package for investors. The Desert Gold team is impressive and has had major success in creating value with West African gold assets. I am very enthusiastic about the future and see great opportunity for the company.
Benefits to Ashanti Shareholders
Benefits to Desert Gold Shareholders
|(1)||Barrickâ€™s Loulo-Gounkoto mine complex to the west with ore reserves of 32 Mt (million tonnes) average at 4.6 g.t for 3.7 million oz Au in the Proven and Probable category. BCM’s (formerly Endeavour Mining) Tabakoto and Segala mines which hosts ~3 million oz Au (18.5 Mt at 3.5 g/t for 1.8 million oz Au Measured and Indicated, 9 Mt at 3.6 g/t for 1 million oz Au Inferred and 6.4 Mt at 3.5 g/t for 0.7 million oz Au Proven and Probable. B2Gold Fekola mine to the south with ore reserves of 48.3 Mt average at 2.37 g/t gold for 3.34 million oz Au in the Proven and Probably category and 65.8 Mt average at 2.13 g/t gold for 4.5 million oz Au. To the north Sadiola/Yatela mine contains ore reserves of 38 Mt at 1.57 g/t gold for 2 million oz Au and 87 Mt at 1.58 g/t gold for 6 million oz Au in the Measured and Indicated category. Source: company annual reports and corporate filings.|
|(2)||Barrick (formerly Randgold) May 2017 technical report on the Massawa Gold Project|
Three photos accompanying this announcement are available at:
LOI Conditions & Steps to Definitive Agreement
The Proposed Transaction is subject to a number of conditions, including, but not limited to, Ashanti and Desert Gold entering into one or more binding definitive agreements containing customary terms and conditions, including representations and warranties customary in a transaction of this nature. In the event that definitive agreement(s) are entered into between the parties, and subject to the final transaction structure, the closing of the Proposed Transaction will be subject to additional conditions precedent including, but not limited to, the receipt of all required approvals, approval of the Proposed Transaction by the requisite majority of shareholders of Ashanti by way of special meeting of Ashanti shareholders and agreement on customary non-solicitation covenants, board support and other standard provisions for transactions of this nature. In addition to shareholder and regulatory approvals, the closing of the Proposed Transaction is conditional on Ashanti being granted a renewal of the Kossanto East exploration permit in Western Mali which is due to expire on May 7, 2019. Under the terms of the LOI, Ashanti’s CEO Tim McCutcheon will join the board of Desert Gold upon closing of the Proposed Transaction.
Ashanti and Desert Gold are committed to consummating the Proposed Transaction in an expedited manner and will issue further information about the Proposed Transaction in the near future. There can be no assurances that any transaction relating to the Proposed Transaction or otherwise will result, or as to the final definitive terms thereof.
This press release contains certain scientific and technical information of Desert Gold and Ashanti. Each party is solely responsible for the contents and accuracy of any scientific and technical information disclosure relating to it.
Don Dudek, P.Geo. is a director of Desert Gold and a Qualified Person under National Instrument 43-101, has reviewed and approved the Desert Gold scientific and technical information contained in this press release.
Dr. Paul Klipfel, CPG (AIPG certification #10821), Ashanti’s COO and Chief Geologist is a Qualified Person as defined by Canadian NI 43-101 and has supervised the preparation of the scientific and technical information that forms the basis for this news release. Dr. Klipfel is responsible for all aspects of the work on the Kossanto East property including the Quality Control/Quality Assurance programs. Dr. Klipfel is not an Independent Person, as he is a shareholder of Ashanti.
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