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African Barrick Gold Agrees To Transfer Tulawaka Gold Mine

African Barrick Gold Plc. (ABG.L,ABGLF.PK) announced Friday that it is has reached an agreement with STAMICO, the Tanzanian State Mining Corporation, whereby STAMICO will acquire the Tulawaka Gold Mine and certain exploration licenses surrounding Tulawaka for consideration of $4.5 million and the grant of a 2% net smelter royalty on future production in excess of 500,000 ounces, capped at $500,000.

As part of the deal, STAMICO will take ownership and management of the rehabilitation fund established as part of the closure plan for the mine, in return for the assumption of all remaining past and future closure and rehabilitation liabilities for Tulawaka, and will indemnify the other parties to the agreement in relation to these liabilities. This will result in a cash payment by ABG to STAMICO of the balance of the rehabilitation fund, which currently stands at $17.6 million, less the transaction consideration on completion.

Tulawaka is 100% owned by the Tulawaka Joint Venture, in which ABG holds a 70% economic interest through a wholly owned subsidiary, with MDN Inc holding the remaining 30% of the Joint Venture. Production at Tulawaka ceased in the second-quarter of 2013.

The transaction has been approved by the Board of African Barrick Gold and its subsidiaries and STAMICO. It is subject to the satisfaction of regulatory approvals before completion.

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