Home » Perseus Mining Buys Stake in OreCorp’s Tanzanian Gold Project

Perseus Mining Buys Stake in OreCorp’s Tanzanian Gold Project

The strategic investment gives Perseus exposure to an attractive African gold project with a probable ore reserve of 2.6 million ounces.

by Motoni Olodun

Perseus Mining Ltd, an Australian gold producer, developer and explorer, has announced that it has acquired a 15.03% interest in OreCorp Ltd, a mineral development company that owns the Nyanzaga Gold Project in Tanzania. The strategic investment is worth A$39.1 million and gives Perseus exposure to an attractive African gold project with a probable ore reserve of 2.6 million ounces.

The Nyanzaga Gold Project is located in northwest Tanzania, near Lake Victoria, where several large-scale gold mines are operating. The project has a pre-feasibility study completed in 2017 and is currently undergoing a definitive feasibility study, which is expected to be completed in the first half of 2024. OreCorp plans to develop the project as a conventional open pit and carbon-in-leach operation, with an initial mine life of 12 years and an average annual production of 213,000 ounces.

Perseus said that it is not currently in active discussions with OreCorp and does not intend to submit a change of control transaction in competition to the current scheme that Silvercorp Metals Inc, a Canadian mining company, has offered to OreCorp shareholders. However, Perseus said that it would welcome the opportunity to engage with OreCorp to determine an optimal and expedited pathway for the development of the Nyanzaga Gold Project.

Silvercorp Metals Inc, which is the largest primary silver producer in China, has proposed to acquire all of the issued and outstanding shares of OreCorp for A$0.70 per share, valuing the company at A$323 million. The scheme is subject to approval by OreCorp shareholders at a meeting scheduled for December 8, 2023. Perseus said that it intends to vote against the scheme, as it believes that its investment in OreCorp is more valuable than the offer price.

Perseus Mining is a multi-mine, multi-jurisdiction gold producer in Africa, with three operating mines in Ghana and Côte d’Ivoire, and a fourth mine under development in Sudan. The company produced 535,281 ounces of gold at an all-in site cost of US$959 per ounce in the fiscal year 2023 and paid a dividend of 3.54 cents per share. Perseus has a proven track record of delivering on promises, maximising cash flow and providing capital growth for shareholders through exploration success and judicious acquisitions.

The acquisition of OreCorp’s stake is in line with Perseus’s strategy of pursuing opportunities that complement its existing asset portfolio and organic growth program. The company said that it has the ability, should the opportunity arise, to deploy its engineering, development and operating expertise and balance sheet to meaningfully contribute to the successful development and operation of the Nyanzaga Gold Project.

The gold mining sector in Tanzania has been growing steadily in recent years, despite some challenges such as regulatory uncertainty, tax disputes and social conflicts. Tanzania is the fourth largest gold producer in Africa, after South Africa, Ghana and Mali, and has a gold reserve of 45 million ounces. The country has a long and successful history of gold mining and is home to some of the world’s largest gold deposits. The government of Tanzania has also expressed its commitment to support the development of the mining industry and to ensure that the benefits are shared with the local communities and the nation.

Source: Investing.com


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