On 23 July 2012, African Barrick Gold plc (ABG) announced that it had entered into an agreement with Aviva Corporation Limited (Aviva) to acquire all of the outstanding share capital of Aviva Mining (Kenya) Limited (AMKL) for initial cash consideration of approximately A$20 million. A further potential payment of A$10 million will become payable to Aviva if a National Instrument 43-101 compliant indicated resource of 3 million ounces of gold is declared over the project areas. ABG has also agreed to provide up to an additional A$1 million to Aviva by way of a purchase price advance to cover the costs of an agreed exploration programme until the transaction closes, repayable under certain circumstances in the event that the acquisition does not complete. AMKL’s assets include interests in a number of special licences in west Kenya, approximately 300km northwest of Nairobi, near the border of Uganda and on the shores of Lake Victoria.
The acquisition is subject to various conditions, including the approval of Aviva’s shareholders under the ASX Listing Rules, which will be sought at an extraordinary general meeting expected to be convened in late August or early September, and the consent of the Kenyan Competition Authority, with completion expected shortly thereafter.
ABG is a UK public company listed on the Main Market of the London Stock Exchange (LSE) and with a secondary listing on the Dar es Salaam Stock Exchange (DSE), headquartered in London. It is one of the five largest gold producers in Africa and this acquisition represents its first move into Kenya. ABG is majority owned by Barrick Gold Corporation (NYSE & TSX: ABX), the world’s largest gold producer.
Aviva is a resource development company listed on the Australian Stock Exchange (ASX: AVA) and the Botswana Stock Exchange, with its head office in Perth. The company is developing a pipeline of energy and metal projects both in Africa and Australia.
The Shearman & Sterling team of lawyers in the firm’s London and Paris offices includes M&A partner Laurence Levy, project finance partnerChristophe Asselineau and finance partner Mei Lian, assisted by environment counsel Mehran Massih, executive compensation & employee benefits counsel Sam Whitaker and associates Paul Pasalic, Fabien Lanteri-Massa, Stéphanie Imbault and Sarah Brufal. Counsel Simon Lethermanand associate James Leslie advised on tax aspects of the deal.
