The Mali Lithium Ltd (ASX: MLL) share price has surged 25% today after the company announced that it had entered an agreement to acquire the Morila Gold Mine in Mali.
What are the details of the acquisition?
Mali Lithium has entered into an agreement to acquire an 80% interest in the Morila Gold Mine in Mali, which it will purchase from Barrick and AngloGold for an estimated US$22 million–27 million.
According to the announcement, Morila is a world class asset that has produced in excess of 7.4 million ounces of gold over 20 years from a 4.5 million tonne per annum plant.
The final sale amount will be determined when the transaction closes. The reason for this is that the Morila asset has not received an audit for 3 years. Before the closing price can be decided, any tax credits need to be considered. Morila may also face tax liabilities before the acquisition is finalised.
The acquisition is subject to Mali Lithium obtaining financing for the acquisition and subject to no objection from government.
The Morilla asset is currently in production and, according to Mali Lithium, it will provide cash flow from the time the acquisition is completed. Additionally, Mali Lithium have stated that the asset has immediate potential to increase production from 3 satellite pits.
Mali Lithium estimate that the inferred mineral resource adjacent to and beneath the Morilla pit contains 32 million tonnes at 1.26 grams per tonne of gold, with a total of 1.3 million ounces of gold.
A new mineral resource estimate update and a new mine plan are being prepared using current gold prices. According to Mali Lithium, little extension drilling has occurred at Morilla in the last decade to follow up hits which have included 56 metres at 4.97 grams per tonne of gold. Mali Lithium stated that the acquisition will consolidate 685 square kilometres of "highly prospective tenure" for exploration.
The parties are targeting completion of the agreement by the end of October 2020.
About Mali Lithium
Mali Lithium is a resources exploration and development company that is focused on lithium and gold in Mali, West Africa. It changed its name from Birimian Ltd in 2019.
Earlier this month, Mali Lithium released a business update that stated it intended to increase its exposure to gold. It also stated that the definitive feasibility study for its Goulamina lithium asset was in its final stages. The company announced that there had been political instability in Mali, however, it also stated that there were encouraging signs of a civilian government emerging with the support of a majority of Malians.
In July, Mali Lithium announced a significant increase to the mineral reserves at its Goulamina lithium asset.
Mali Lithium had $891,000 in cash on hand at 30 June 2020.
The Mali Lithium share price is up 175% since its 52-week low of 8 cents and has returned 175% since the beginning of the year.
