March 6th, 2020 | 10:21 CET
Barrick Gold, Desert Gold Ventures, Teranga Gold - a pure M&A play
The West of Africa is rich in raw materials. Well-known companies are present in Senegal and Mali and are exploring for gold deposits there. In 2018, Mali produced the fourth largest quantity of gold in all of Africa, with more than 2 million ounces. In addition to producers, exploration companies are also active there and are exploring the geology through appropriate drilling. Usually, the aim of these often smaller companies is to explore a portfolio of areas for deposits in order to subsequently sell them to producers if successful. A perfect environment for mergers and acquisitions.
time to read: 1 minutes
|
Author:
Mario Hose
ISIN:
CA0679011084 , CA25039N4084 , CA8807972044
Table of contents:
"[...] Our SMSZ project is the largest contiguous land package of any exploration company in the region at 400km2 and overlays a 38km portion of the prolific Senegal Mali Shear Zone. [...]" Jared Scharf, CEO, Desert Gold Ventures Inc.
Author
Mario Hose
Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
Tag cloud
Shares cloud
Diversified global player
Barrick Gold is one of the most renowned commodity companies with areas around the globe. The company has made numerous acquisitions in the past, such as the acquisition of its former competitor Randgold, which has allowed Barrick to grow significantly. In connection with acquisitions, it is not uncommon for the buyer to subsequently resell projects in order to focus on the core and refinance the previous purchase price. As the company announced this week, Barrick has sold the Massawa Project in Senegal to Teranga Gold.
Barrick received CAD 300 million in cash and the equivalent of CAD 80 million in shares from Teranga Gold. In addition, a performance component was agreed upon, through which Barrick may receive up to an additional CAD 50 million depending on the future price of gold. The market value of Barrick is currently approximately CAD 49 billion.
Expansion of reserves through acquisition
Teranga Gold is active in West Africa in Senegal, Ivory Coast and Burkina Faso. The company operates mines in Senegal and Burkina Faso and four exploration projects in Ivory Coast. The Sabodala Mine in Senegal fits with Barrick's recent acquisition of the Massawa area. Sabodala contains approximately 2.19 million ounces of gold and is expected to be mined in 13 years. For this reason, acquisitions make sense from the perspective of the company and investors. Teranga currently has a market capitalization of over CAD 780 million.
Desert Gold Ventures with takeover potential
The exploration company Desert Gold Ventures has a project located in the region of Teranga's Sabodala Mine, but in neighbouring Mali. Geologically speaking, there are similarities and in this context, the company's drilling results will certainly be evaluated by the producers in the region. It can be assumed that from a critical amount of proven gold deposits onwards, the interest in Desert Gold will increase dramatically.
The company has an area of around 400 square kilometres, which could become a significant value driver in connection with the expansion of the deposits. The market value of Desert Gold Ventures is approximately CAD 13 million. In light of the increasing importance of the region in West Africa, the company's potential is correspondingly high.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.
Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.
Risk notice
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.
The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.
