Kinross Gold is selling its 90% interest in the Chirano mine in Ghana to fellow Canadian Asante Gold in a cash and shares deal worth $225 million.

The open-pit and underground mining operation in southwestern Ghana produced 154,668 gold-equivalent ounces in 2021, compared to 166,590 in 2020 and is located immediately south of Asante Gold’s Bibiani gold mine. The government of Ghana holds a 10% interest.  

The Toronto-based company will receive $115 million in cash and Asante common shares with a value of $50 million based on the 30-day average price of the buying company prior to closing.

Kinross will also receive a total deferred payment of $60 million in cash, with 50% payable on the first anniversary of closing and the other 50% payable on the second anniversary of closing.

Chirano represented nearly 3% of Kinross’ total mineral reserve estimates as of year-end 2021 and with its sale, the company will no longer have assets or interests in Ghana.

“[The mine] is a relatively small, short-life mine in an operating jurisdiction with no synergies other Kinross assets”, BMO Metals and Mining analyst Jackie Przybylowski wrote on Monday April 25^th, 2022.

“Even correcting for what is potentially a low mined grade in our forecasts, we believe the sale price is a fair value.”

The deal, expected to close around the end of May, follows Kinross’ sale earlier this month of all its Russian assets to Highland Gold Mining.

Before the invasion of Ukraine, Kinross had forecast that about 13% of its global production would come from Russia, where it operated for 25 years.

Asante, which acquired Bibiani from Australia’s Resolute Mining (ASX, LON: RSG) last year, began production at the asset in February.