Randgold Plans To Sell West Africa Project

LONDON (AP) — Randgold Resources Ltd. said Tuesday it has signed a letter of intent to sell its interest in the Kiaka gold project in Burkina Faso to Volta Resources Inc. for $3.7 million cash plus 20 million shares in Volta.

The gold mining company said the amount would be paid and shares issued over 24 months following the close of the deal.

Toronto-based Volta is a mineral exploration company with a strong focus on gold in West African countries, including Burkina Faso, Ghana and Mali.

Randgold Chief Executive Mark Bristow said the company already had a full development pipeline, with the expansion of the company's Loulo complex, construction of a new mine at Tongon and its advanced Massawa and Gounkoto projects.

"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," he said in a statement.

But Bristow noted that Randgold will be a significant shareholder in Volta and will continue its involvement with Burkina Faso and the Kiaka project.

The deal is subject to the completion of a definitive agreement within 30 days of the letter of intent, during which period Volta will carry out its final due diligence. The transaction also depends on the approval of Volta shareholders, receipt of third-party consents and regulatory approvals, including the approval of the Toronto Stock Exchange.

Shares of Rangold rose $1.07 to $69.37 in afternoon trading.