Under pressure, AJN Resources scraps planned Kibali stake purchase (updated)

DRC Gold

02/03/2020 17:27

(Adds Congolese government comment)
    JOHANNESBURG, March 2 (Reuters) - AJN Resources has scrapped
a plan to purchase a 10% stake in Congo's biggest gold mine from
state-owned gold firm SOKIMO, buckling to pressure from Barrick,
the operator and 45% stakeholder of the Kibali mine which
opposed the deal.
    The Canadian junior miner's shares  AJN.CD  tumbled nearly
50% last week after Reuters reported Barrick  ABX.TO  issued a
cease-and-desist notice to block the Kibali stake purchase.
 urn:newsml:reuters.com:*:nL5N2AS8BD  urn:newsml:reuters.com:*:nL5N2AQ578
    "As a result of its due diligence and further information
received,  AJN  will not proceed with its proposed acquisition
of SOKIMO's 10% free carried interest in the Kibali Gold Mine,"
the company announced in a release late on Sunday. 
    The transaction, announced in an AJN statement on Feb. 6
that cited a memorandum of understanding with SOKIMO, would have
required approval from both Barrick and Anglogold Ashanti, each
of whom own 45% of Kibali. 
    Congolese civil society groups added to the pressure on AJN,
demanding transparency over the deal and asking why SOKIMO's
stake sales were not subject to an open tender. 
    Congo's public portfolio ministry emphasised in a statement
on Monday that AJN had only announced its intention to buy the
stake and that no final deal had been reached. The final word on
any deal will belong to the government, it said.   
    AJN said it was continuing due diligence on other projects
it plans to acquire from SOKIMO (Société Minière de Kilo-Moto),
namely 30% stakes in Zani-Kodo, Nizi, and Kibali South, and 35%
stakes in Giro Goldfields and Wanga (Tendao). 
    AJN Resources' Frankfurt-listed shares  5AT.F  were up 5.1%
by 1026 GMT on Monday after the announcement. 

 (Reporting by Helen Reid; Additional reporting by Stanis
Bujakera in Kinshasa; Editing by Kirsten Donovan and David
Evans)
 ((Helen.Reid@thomsonreuters.com; +27 11 595 2852;))