PERTH (miningweekly.com) – Gold miner Resolute Mining has made a $305-million takeover offer for privately-held Toro Gold, which holds the Mako gold mine, in Senegal.

Under the terms of an implementation agreement, Resolute will acquire all of the shares of Toro Gold in exchange for $130-million in cash and 142.5-million Resolute shares, valued at A$1.45 each.

On the completion of the transaction, Toro Gold will hold a 15.8% interest in Resolute.

The cash component of the offer has been fully funded through a finance facility provided by Taurus Funds Management.

The Mako gold mine produced 156 926 oz of gold in 2018, at an all-in sustaining cost of $655/oz. Resolute told shareholders on Wednesday that the addition of the project would expand its existing portfolio, which includes the Syama gold mine, in Mali, the Bibiani mine, in Ghana, and the Ravenswood mine, in Australia.

In 2019, production at Mako has been targeted at 160 000 oz, with the project estimated to host a mineral resource of 1.22-million ounces and a reserve of 928 000 oz.

With the acquisition of Mako, Resolute has now revised its 2019 production and cost guidance to 400 000 oz, up from 330 000 oz, while all-in sustaining costs have been updated from $990/oz to $960/oz.

Resolute MD and CEO John Welborn said that the acquisition of Toro was consistent with the company’s ambition to create a multi-mine, low-cost, Africa-focused gold producer.

“The Mako gold mine is a high-quality, strongly cashflow generative producing asset which complements our existing portfolio of large-scale, long-life mines. The Toro Gold team discovered the Mako orebody in 2010 and has successfully developed a high-value gold mine.

“We are delighted to combine our businesses. Senegal is an attractive investment jurisdiction for mining, and we look forward to working closely with the government of Senegal, our 10% partner at Mako, to maximise the value within Toro Gold’s portfolio.”

Toro Gold founder and CEO Martin Horgan told shareholders that the transaction provided them with the unique opportunity to realise immediate value while also becoming part of a premier African gold producer.

“The contribution of our world-class Mako gold mine to Resolute’s high quality portfolio of large scale, long-life assets creates a compelling African gold investment proposition under the stewardship of an excellent and proven management team which will further maximise value for shareholders.”