Acacia Mining Plc (LON:ACA) today announced that it has signed definitive documentation with its partner, Sarama Resources Ltd. (TSX-V:SWA), to terminate the earn-in agreement in respect of the South Houndé Project in south-western Burkina Faso. Termination is subject to satisfaction of certain conditions under the definitive documentation. The commencement of this process was earlier announced to the market on 28 November 2018.
Acacia’s divestment of South Houndé fits with the Company’s strategy of divesting certain non-core assets as part of an ongoing review of its exploration portfolio. The agreement allows Sarama to move to 100% ownership of the Project by making a payment of US$2 million in staged payments. Acacia will also receive US$2 million once commercial production commences and retain a net smelter return royalty (NSR) of 1-2%, based on a sliding rate basis on gold price received and a capped gold production of 1Moz Au. In addition, Acacia will be granted 5 million warrants for common shares in Sarama, exercisable for five years.
Acacia remains committed to exploration in Burkina Faso with various earn-in agreements still active and which provide exposure to approximately 2,000 km² of the prospective Houndé Belt.