JOHANNESBURG (miningweekly.com) – Dual-listed gold miner Teranga Gold Corporation has entered into a $135-million stream transaction with TSX-listed Franco-Nevada Corporation to acquire the balance of the Oromin joint venture group (OJVG) gold project, in Senegal.

Earlier this year, Teranga acquired a 43.5% shareholding in the OVJG deposit in a takeover of Oromin Exploration.

The OJVG reserves were estimated to host some 1.44-million ounces of gold, and would provide Teranga with the ability to blend ores from multiple deposits, which would enhance the company’s cost profile.

Teranga said on Friday that the stream transaction would allow the company to enter into definitive share purchase agreements with Bendon International and Badr Investment & Finance Company to acquire the balance of the OJVG project and to retire $30-million of its $60-million debt facility with Macquarie.

“The acquisition of the OJVG is the most accretive and synergistic transaction that I have ever seen in all my years of developing and acquiring mining projects,” said Teranga executive chair Alan Hill.

“The addition of OJVG’s 1.4-million ounce of openpit mineral reserve to Teranga’s existing mineral reserve will double our openpit reserve base, before we have even started any optimisation work, and we expect to see significant value creation as we leverage off our existing mill and infrastructure.”

Under the terms of the transaction, Franco-Nevada would provide a $135-million deposit, of which $105-million would be used to acquire the OJVG stake. The agreement required Teranga to deliver 22 500 oz/y of gold over the first six years of operation, followed by 6% of production thereafter.

Franco-Nevada’s purchase price per ounce would be set at 20% of the spot gold price with the stream agreement having an initial 40-year term.

Franco-Nevada CEO and president David Harquail said that the transaction would provide the company with an attractive stream asset that could become one of the group’s top contributors.

“We are pleased to support the Teranga management team in structuring a transaction that is a win-win for all parties. We believe Senegal will be a growing mining investment destination with attractive geology and secure mineral tenure.”