Teranga Gold Corporation (TSX:TGZ) entered into a share purchase agreement to acquire 90% interest in the Massawa project in Senegal from Barrick Gold Corporation and Compagnie Senegalaise De Transports Transatlantiques Afrique De L'ouest Sa for approximately $440 million on December 9, 2019. The consideration consists of an up-front payment of $380 million, comprised of approximately 20.72 million Teranga common shares with a value of $3.85 per share and an aggregate value of approximately $80 million and a cash payment of approximately $300 million, plus a contingent payment of up to $50 million which is based upon the average gold price for the three year period immediately following closing. The contingent payment, which is payable three years following closing, is (i) $25 million if the three year average gold price is greater than $1,450 and less than $1,500 per ounce (ii) $35 million if the three year average gold price is greater than $1,500 and less than $1,600 per ounce (iii) and $50 million if the three year average gold price exceeds $1,600 per ounce. Barrick will receive 92.5% of the total purchase price for its interest in the Massawa project, with the balance to be received by Compagnie Senegalaise De Transports Transatlantiques Afrique De L'ouest Sa for its minority interest. Government of Senegal holding the remaining 10% interest in Massawa. Tablo, controlled by Teranga Director David Mimran, expected to invest $45 million to retain 21.2% ownership on a pro forma basis. Barrick expected to hold a 11.45% ownership in Teranga (pro forma basis) and is entitled to nominate one member to the Company's board of directors so long as it retains 10% equity ownership. In total, $225 million of the Upfront Consideration will be funded under an acquisition facility agreement by Teranga's existing lender, Taurus Funds Management Pty Ltd., and a total of $231 million in new equity. As disclosed by Teranga in a press release dated October 10, 2019, Teranga intends to partially finance the transaction by way of a bought deal public offering of 27.45 million subscription receipts at a price of CAD 5.1 per receipt and a Private placement of 11.67 million common shares to Tablo Corporation at the same price. The transaction is subject to receipt of the Massawa exploitation license and residual exploration license from the Government of Senegal, certain other acknowledgments from the Government of Senegal and other customary closing conditions. The transaction is also conditional upon the closing of Teranga's concurrent debt financing, prospectus financing and private placement financing, each of which are also inter-conditional, as well as other customary closing conditions for a transaction of this kind. On February 13, 2020, certain key approvals from the Government of Senegal in order to proceed to close the transaction were received. The remaining conditions including the granting by the Government of Senegal of an exploitation license and a residual exploration license for Massawa would be satisfied in the coming weeks. The transaction is expected to close in the first quarter of 2020.

Scotia Capital Inc. is acting as financial adviser to Barrick. Melanie Shishler, Richard Fridman, Scott R. Hyman, Carol D. Pennycook, Sarah V. Powell, Christopher Anderson, Geoffrey S. Turner and David Wilson of Davies Ward Phillips & Vineberg LLP and Norton Rose Fulbright LLP are acted as legal advisor to Barrick. Canaccord Genuity Corp., Cormark Securities Inc., and Cutfield Freeman acted as financial advisor to Teranga. Donald Belovich, Simon Romano, Alethea Au, Kevin Bailie, Anabel Hallewell, Elizabeth Breen, Quentin Markin, Steven Bennett, Jonathan Willson and Sabina Delvecchio of Stikeman Elliott LLP acted as the legal advisors to Teranga. RBC Capital Markets has provided an independent fairness opinion to the Board of Directors of Teranga. Fasken Martineau DuMoulin LLP advised Taurus Funds Management in the transaction.

Teranga Gold Corporation (TSX:TGZ) completed the acquisition of 90% interest in the Massawa project in Senegal from Barrick Gold Corporation and Compagnie Senegalaise De Transports Transatlantiques Afrique De L'ouest Sa on March 4, 2020.