Shanta Gold, an East African-focused gold producer led by Tanzanian businessman Ketan Patel, is attempting to buy three more prospecting licenses in the West Kenya project from Barrick Gold, a Canadian mining company with 16 operating sites in 13 countries.
According to BusinessDaily, Shanta Gold, a London-listed company, will take over seven prospecting licenses for the project once Barrick Gold receives the government’s approval.
The move comes nearly two years after Shanta Gold paid Ksh1.4 billion ($11.7 million) in cash and stock for Barrick’s West Kenya assets, which include the right to mine gold over a 1,161-square-kilometer area.
Four of the seven licenses under the West Kenya project were owned completely by Barrick Gold, covering an area of 1,121 square kilometers, while the other three licenses, covering an area of 40 square kilometers, were co-owned with Advance Gold Corp on behalf of Gold Rim Exploration Kenya Limited, with stakes of 87.16 percent and 12.84 percent, respectively.
The West Kenya project is believed to have 1.6 million ounces of gold resources. At the time of writing, gold prices were trading near one-month lows below $1,740 per ounce, having been under heavy selling pressure for six straight sessions due to renewed fears that the U.S. Federal Reserve will continue to aggressively raise interest rates to combat inflation.
Last year, Shanta recorded a net loss of $7.3 million on the project, owing to considerable spending on feasibility studies to assess the entire extent of gold reserves in the area and whether to proceed to production.
The East African gold company saw its earnings increase by 210 percent from $1 million to $3.1 million in the first half of its 2021 fiscal year, mainly due to tax modifications during the period.
According to experts, the Patel-led gold miner is on track to generate higher sales and stronger earnings as a result of the pricing benefit from gold sales.
