Canadian miner Fortuna Silver Mines is expanding its footprint in West Africa with the acquisition of Australian gold junior Chesser Resources for slightly over US$60 million (A$89m).

The Vancouver-based precious metals producer said the deal would boost its presence in West Africa, where it already has the Yaramoko gold mining complex in Burkina Faso and the Séguéla project, in Côte d’Ivoire.

The acquisition would add to Fortuna’s portfolio the preliminary economic assessment stage Diamba Sud gold project, in Senegal, which is one of the newest gold discoveries in the region, the company said.

Chesser holds tenements in close proximity to tier one gold mines owned by Barrick Gold and B2Gold located in Mali. 

The deal will see Fortuna purchasing 100% of Chesser’s fully paid ordinary shares at A14.2¢ apiece, making it a 95% premium to Chesser’s stock close on Monday, May 8.

It also represents an 83% premium to Chesser’s volume-weighted average price (VWAP) for the past 30 days.

Chesser shareholders will get 0.0248 (Australian cents) of a Fortuna share for every share held.

A scoping study conducted on Diamba Sud last year has revealed its prospect for a 43% internal rate of return over a 7.5-year mine life.

Fortuna is looking to undertake a detailed optimization study of the existing technical data and economic parameters. It also plans to prepare an updated exploration and development plan, post-deal completion.

Chesser’s board has unanimously backed the deal and is recommending its shareholders to do the same.

Other than its assets in West Africa, which Fortuna added in 2021 through the acquisition of fellow Canadian miner Roxgold, the company has a presence three operating mines Latin America — San Jose in Mexico, Caylloma in Peru and Lindero in Argentina.