Blackthorn Resources [BTR:AU], which is poised to become the first base metals miner in Burkina Faso, is welcoming pitches from financial advisors who could help it divest gold assets in the West African country, according to a source.
The Sydney, Australia-based company had previously worked with Perth-based PCF Capital for the process, however the mandate expired with no deal imminent and the arrangement “mutually” ended in 4Q12, the source said. The company uses UBS as corporate advisor, KPMG for auditing, Investec for broker services, and SRK Consulting and MSA Group as technical advisors.
ASX-listed Blackthorn, which has a market capitalization of AUD 239m (USD 251.5m), also welcomes approaches from companies interested in the asset, the source noted. This news service revealed last September that the company was looking to sell the gold assets to focus on base metals. Since then, a number of resources and exploration companies looked at the asset but Blackthorn was unable to seal a deal, the source confirmed. The company’s market cap has almost doubled from September.
Blackthorn will consider an outright sale, as well as other alternatives such as a farm-in arrangement or part sale/joint venture, the source said without elaborating.
Potential buyers would likely be gold mining companies already operating in Burkina Faso, or possibly juniors seeking entry into the market, said a second source familiar with the situation. LSE- and TSX-listed Cluff Gold, East Africa-focused Chalice Gold Mines [CHN:AU], ASX-listed Golden Rim Resources [GMR:AU], and Victoria, Australia-based Unity Mining [UML:AU], could be interested in Blackthorn’s gold assets, according to the previous report, which cited sector analysts.
While gold mining interest in the once red-hot region has begun to wane over the past 12 months following Ampella Mining [AMX:AU]’s well documented struggles in Burkina Faso and unrest in neighboring Mali, Blackthorn would likely sell the asset by 2H13 as interest is expected to return on the back of higher forecast gold prices, the second source added.
Blackthorn’s Burkina Faso gold project is JORC-compliant with an inferred resource of 4.1m tonnes at 1.06 grams per tonne, for 139,000 contained gold ounces.
The company would likely receive about USD 20 an ounce for its gold assets, based on the average price paid per ounce for an advanced exploration project over the past three years, the second source said. A sector banker agreed, adding that given the relative small size and low grade, Blackthorn could expect to fetch about AUD 2m for the gold asset.
The estimated value of the assets was based on recent deals in the area, according to the banker. In February 2012, LSE- and TSX-listed Cluff Gold [LON:CLF, CFG:TSX] bought the Sega gold project from Orezone Gold [ORE:TSX] for USD 29.6m, as reported. The Sega project hosts gold resources of 450,366 ounces (8.3m tonnes at 1.69 grams per tonne) and inferred gold resources of 147,344 ounces (2.9m tonnes at 1.58g/t).
by Adam Orlando in Perth