TORONTO (miningweekly.com) – LSE- and Nasdaq-listed Randgold Resources has signed a letter of intent with Canadian Volta Resources, to sell its Kiaka gold project, in Burkina Faso.

Volta will pay C$4-million plus 20-million of its own shares, in installments over the two years after the transaction closes.

"Acquiring Kiaka from Randgold fulfills Volta's key publicly stated goal to add an advanced gold project in our region to our portfolio that we believe we can fast-track towards a development decision,” CEO Kevin Bullock said.

“We have evaluated many projects during the past year and believe that Kiaka is the superior project.”

Randgold opted for the disposal because it already has a full development pipeline on its hands, CEO Mark Bristow said in a statement.

Randgold is expanding its Loulo complex, in Mali, building the new Tongon mine, in the Côte d'Ivoire, and exploring two advanced prospects – Massawa, in Senegal, and Gounkoto, in Mali.

“While Kiaka has considerable potential, it does not currently fit Randgold Resources’ development profile and is better suited to Volta, which has a strong team and a good track record in the region,” Bristow said.

Volta believes it can define a multi-million ounce, high tonnage, low strip ratio, deposit at Kiaka “within a condensed timeframe”, said COO Vic King.

“We are confident that the aggressive work programme we have planned for Kiaka over the next nine months will deliver significant NI43-101 compliant resources.”

The Kiaka exploration permit covers an area of 244 km² and is located approximately 120 km southeast of the capital, Ouagadougou.

The closing of the agreement is subject to the completion of a definitive agreement within 30 days from the execution of the letter of intent, during which period Volta will carry out its final due diligence. 

The transaction will also be conditional upon the approval of Volta shareholders, receipt of third-party consents and regulatory approvals, including the approval of the Toronto Stock Exchange.

Volta Resources was created in early 2008, from the merger of Birim Goldfields and Goldcrest Resources.

The firm has a number of exploration properties in Burkina Faso and Ghana.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.