Fortuna buys Barrick, Iamgold project for $200M

Fortuna Mining (NYSE: FSM; TSX: FVI) is buying the Bambadji gold project in Senegal for $200 million (C$279 million) from Barrick Mining (NYSE: B; TSX: ABX) and Iamgold (TSX: IMG; NYSE: IAG), expanding its position in the West African nation.

The 190-sq.-km Bambadji borders Fortuna’s Diamba Sud project, giving the Canadian miner control of about 60 km of prospective strike along the Senegal-Mali Shear zone.

Diamba Sud “is awaiting final permits and an investment decision following a feasibility study announced in June outlining 116,000 oz. annual [output] over 9.4 years, including 158,000 oz. annually in the first four years,” BMO Capital Markets mining analyst Kevin O’Halloran said in a note late Monday.

“We would expect Bambadji to provide expansion potential to Diamba Sud once in production, and management indicated that plant design at Diamba is proceeding with a potential expansion in mind.”

Shares in Fortuna gained 0.3% to C$14.99 apiece on Tuesday morning in Toronto, valuing the company at C$4.43 billion. They’ve risen 13% since Aug. 7. 

Exploration

Fortuna plans to spend $8 million exploring Bambadji through the end of 2026, with 51,000 metres drilling expected to begin in the third quarter. The company is targeting eight previously identified targets located within a 20-km radius of the Diamba Sud plant site after 214,000 metres of drilling. 

“Generative exploration will advance concurrently on site to explore mineralized trends,”BMO’s O’Halloran said. “Importantly, the company expects to fund its growth at Bambadji, Diamba Sud, and Seguela internally from ongoing cashflows and the treasury, which stood at $435 million at quarter end, with total liquidity of $757 million.”

The drilling so far has shown wide intervals of relatively high-grade, shallow mineralization, the analyst said. Highlights include: 45 metres grading 2.34 grams gold per tonne from 5 metres depth at Kabewest; 47 metres at 3.76 grams from 55 metres downhole at Kabetea; 46 metres at 3.57 grams from 56 metres depth at the Bagata Corridor; and 15 metres grading 8.55 grams from 17 metres depth at Djenebou.

Consolidation

Bringing Bambadji together with Diamba Sud gives Fortuna a substantially larger exploration position in Senegal while allowing it to target prospective ground alongside a project already at the feasibility stage.

“Bambadji represents a rare opportunity to consolidate a large-scale, highly prospective exploration land package immediately adjacent to our feasibility-stage Diamba Sud gold project,” Fortuna CEO Jorge Ganoza said in a statement.

The acquisition further concentrates Vancouver-based Fortuna’s West African portfolio in Senegal and Ivory Coast. The company sold its Yaramoko mine in Burkina Faso for about $130 million last year as part of that shift.