Nordgold resumes talks on sale of Montagne d'Or project in French Guiana

MOSCOW. July 7 (Interfax) - Orea Mining (formerly Columbus Gold) and Russian gold miner Nordgold have resumed talks on the sale of the latter's controlling interest in their joint Montagne d'Or project in French Guiana.

"Orea and Nordgold have mutually agreed to retract the termination of the Acquisition, and have proposed amended terms to the share purchase agreement," Orea said in a press release.

The last version of the agreement was rejected by the authorities of Canada, where Orea is based, because Orea could not guarantee that the proceeds from the sale would go into a frozen account and not make their way to Nordgold's beneficiaries, who are subject to Canadian sanctions.

The amended agreement provides that the CAD$100 million (about $75 million at current rate) payment will only be made if and when all sanctions are lifted against Nordgold and its shareholders in all applicable jurisdictions, including in Canada, the United States, France, the UK and the EU, Orea said.

The amended agreement also stipulates that the payment would no longer be due or payable if sanctions are still in effect the earlier of three years from receipt by Orea of all permits to operate a gold mine at Montagne d'Or, and seven years from closing of the acquisition, the company said.

The applicable sanctions authorities have been provided with a copy of the amended agreement for review, Orea said. The agreement has not been executed by Orea nor by Nordgold and will not be signed without the authorization of applicable sanctions authorities, the company said.

Nordgold started investing in the Montagne d'Or project in 2013. When its investments reached $30 million and the feasibility study was completed, the company exercised an option to acquire a 55.01% stake in the project. Columbus Gold retained the remainder.

Montagne d'Or's reserves are estimated at 2.75 million ounces of gold, and its resources are estimated at 4.81 million ounces. A feasibility study conducted in 2017 envisaged the production of 237,000 ounces of gold per year in the first 10 years of operation.