Politics and policy
UK company buys Kenya gold rights for Sh2.7bn
Posted Wednesday, August 15 2012 at 21:06
- Africa Barrick Gold (ABG) has announced that it is acquiring rights to prospect for gold in western Kenya at a cost of Sh2.67 billion.
- The company has applied to buy-out Aviva Mining (Kenya) Limited’s prospecting rights in Nyanza and Western provinces where recent activity has found large reserves of gold.
- The deal also hands ABG access to Aviva Mining’s right to earn up to 75 per cent interest in a second joint venture with Advanced Gold Corporation.
- ABG has also accepted to provide an additional Sh86.7 million (A$1 million) to Aviva (K) to cover the cost of an agreed exploration programme from June 1, 2012 until the transaction closes.
The ongoing transformation of Kenya’s nascent mining sector into a multi-billion- shilling industry has been boosted by the entry of a foreign company into the search for gold.
Africa Barrick Gold (ABG) has announced that it is acquiring rights to prospect for gold in western Kenya at a cost of Sh2.67 billion.
The company, which is listed on the London Stock Exchange, has applied to buy-out Aviva Mining (Kenya) Limited’s prospecting rights in Nyanza and Western provinces where recent activity has found large reserves of gold.
Aviva (K) is a subsidiary of Aviva Corporation Limited, which is listed on the Australian Securities Exchange (ASX) and the Botswana Stock Exchange.
“There is growing interest in our gold mining sector because of success that the companies prospecting on the ground have realised in the recent past. It is a sign of confidence that the Kenyan gold mining business has potential supported by a good business environment,” said Moses Masibo, the commissioner of geology and mining.
The ABG-Aviva deal comes only two months after international gold-producer GoldPlat reported a 162 per cent increase in the volume of gold reserves discovered at its Kilimapesa mines in Trans Mara district.
The announcement came five months after GoldPlat made the initial shipment of products from Trans Mara, catching the attention of international rivals.
“With 649,804 oz of gold now quantified, we have exceeded the 500,000 resource base targeted for 2012 and achieved a dramatic 520,502 oz increase on our initial resource estimates published in 2009,” GoldPlat’s outgoing CEO Demetri Manolis said in June.
Mining industry insiders said such information excited interest among foreign firms and investors looking for entry into the lucrative and stable gold market away from stock market volatility.
Gold prices in key futures markets such as the US Wednesday climbed marginally to about $1,604.10 an ounce buoyed by entry of investors nervous of the uncertain global economic outlook.
Barrick said the planned acquisition would give it the 51 per cent stake that Aviva Mining (K) holds in a joint venture with Lonmin Plc.
The deal also hands ABG access to Aviva Mining’s right to earn up to 75 per cent interest in a second joint venture with Advanced Gold Corporation.
The principal assets of the present joint venture between Aviva and Lonmin Plc are two special licences — SL123 and SL213 — located in Nyanza Province’s Ndori and Siaya areas respectively.
The second joint venture between Aviva and Advanced Gold has three assets — SL266, SL266 and L267 — situated in Western Province’s Bukura, Sigalagala and Rosterman, respectively.
“This acquisition represents the first step in expanding our footprint out of Tanzania and building our future growth pipeline,” ABG’s CEO Greg Hawkins said, adding that the acquisition makes an attractive entry into an under-explored and highly-prospective land.