LONDON, Sept 27 (Reuters) - African Gold Group and Hummingbird Resources on Wednesday said they had conditionally agreed on an $6.4 million deal for Hummingbird to operate the Kobada Gold Project in Mali.
In two separate statements, African Gold Group said it was selling a 19.99 percent stake to Hummingbird Resources for 8 million Canadian dollars ($6.44 million) and at the same time would allow Hummingbird to acquire half of the Kobada project.
"Hummingbird provides us the financial capacity to develop the Kobada Gold Project and we are also gaining a partner with an operational presence in Mali," said Stephan Theron, Chief Executive Officer of AGG.
Hummingbird said the deal would give it the right to operate the Kobada mine and would enable it to increase annual gold production to more than 150,000 ounces by year by around 2020.
The plan is to truck concentrate to Kobada for processing at Hummingbird's Yanfolila project, which is scheduled to produce its first gold in December.
"This high-grade concentrate would have a material increase to our annual production rates and could add up to an additional 50,000 ounces per annum to our existing average life of mine production of 107,000 ounces," Dan Betts, CEO of Hummingbird said.
Betts told Reuters this month he was looking for opportunities to offset depreciation of assets as Hummingbird brings online the Yanfolila project in Mali.
($1 = 1.2426 Canadian dollars) (Reporting by Barbara Lewis in London and Esha Vaish in Bengaluru; Editing by Edmund Blair)