Trident Royalties PLC (AIM:TRR, OTCQX:TDTRF) has entered into a binding acquisition agreement with a group of private royalty holders to acquire a 50% interest in a 2% net smelter royalty over the Dandoko Gold Project in western Mali.
The project is currently owned by B2Gold Corporation Limited, a company with a market capitalisation of approximately US$3.9 billion (£3 billion).
Dandoko, once the flagship asset of Australia-listed Oklo Resources, was acquired by B2Gold in September 2022 for A$91.3 million (£45 million).
The project is strategically located 25km from B2Gold's Fekola Mill, the company's largest asset. Fekola is targeting a production of 580-610 Koz at a cash cost of US$565-$625/oz for FY2023.
B2Gold believes that Dandoko's metallurgical characteristics are similar to Fekola, suggesting it could be processed at the Fekola facility.
B2Gold is also advancing an engineering study, the 'Fekola Regional Development Plan', to evaluate the potential for a new 4Mtpa processing facility at Anaconda. Resources from both Anaconda and Dandoko are central to this study.
Adam Davidson, chief executive of Trident, emphasised Dandoko's potential for near-term production and its proximity to existing infrastructure.
“The acquisition of the Dandoko Royalty again demonstrates Trident's ability to identify undervalued royalties covering high-quality assets and delivering significant shareholder value,” said Davidson.
“Dandoko is a highly attractive royalty on an asset operated by a senior producer, close to existing processing infrastructure, with a demonstrated pathway to production and significant exploration upside.
“The potential for near-term production, alongside the conservative structure of the transaction, which defers 40% of the consideration until meaningful milestones are achieved at the project, provides a compelling exposure for Trident."
Trident will pay US$3 million (£2.36 million) in cash and issue US$750,000 in Trident shares to the sellers. Additional payments are contingent on future milestones, including a US$1.25 million payment upon the first royalty receipt and another US$1.25 million upon selling 500,000 ounces of gold from the royalty area.