(Ecofin Agency) - AIM-listed Sovereign Mines of Africa (SMA) signed an agreement with Volcanic Metals Corporation to sell its 75% stake in the Mandiana gold mine, in Guinea.

The news comes as the company, subsequent to a strategic examination, decided to stop financing the development of its assets in the country. In exchange for its interest in the mine, SMA will receive ordinary shares representing 9.9% of Volcanic’s outstanding capital shares.

SMA said the deal falls under its global strategy to increase its shareholder value. It intends to keep its stake in Volcanic Metals as long as necessary to achieve this goal. Moreover, the company signed an exclusivity agreement to purchase new assets in the mining industry, and is currently proceeding to due diligence on these projects.

The company is in a transitional period while we execute our new vision […] which includes a potential acquisition within the mining industry, SMA chairman Giles Clarke said.

The Mandiana mine is adjacent to the Yanfolia project which is operated by Hummingbird Resources in Mali.

Louis-Nino Kansoun