Orea, Nordgold sign amended agreement for sale of Montagne d'Or project in French Guiana - buyer

MOSCOW. July 20 (Interfax) - Orea Mining, formerly Columbus Gold, and Russian gold miner Nordgold have signed an amended agreement on the sale of the latter's controlling interest in their joint Montagne d'Or project in French Guiana, Orea said.

The amended agreement provides that a payment of CAD$100 million or about $75 million at current rate will only be made to Nordgold 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. 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 applicable sanctions authorities said they are reviewing the amended agreement.

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.

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

Nordgold is among Russia's top 10 gold miners. The group also has assets in Kazakhstan, Guinea, and Burkina Faso. Marina Mordashova is the controlling shareholder with around 52%.