The scrip deal sees the Canada-based Senegal gold miner notionally paying A20.6c per Gryphon share, a 45% premium over the 20-day VWAP of Gryphon’s shares.

Gryphon shares have been at less than 20c for more than three years, and have spent much of the past 18 months at little more than 5c. However, four years ago the stock was at $2.

Gryphon shareholders will own about 15% of Teranga upon transaction completion.

Gryphon, which closed last week with a market capitalisation of $A54 million, has been unsuccessfully trying to fund the project for the past few years.

Founded and led by NZ geologist Steve Parsons back in 2004, the company originally completed a bankable feasibility study for Banfora in early 2013 - at which time the company had over $A50 million cash.

Unable to find the more than $US200 million required to build a conventional processing operation - in what was a period of poor sentiment for gold - Gryphon’s attention turned to a lower capital cost heap leach development.

A feasibility for that option completed in mid-2014 suggested a capital cost of just under $100 million.

Cash at that time was put at about $A34 million.

Gryphon is currently estimated to have about $9 million cash.

Teranga indicated it was leaning towards the original, CIL flowsheet rather than the heap leach option – “in the absence of financing constraints”.

Development of the project could lift Teranga’s production by 50% to between 275,000 ounces and 325,000oz in 2019, with all-in-sustaining-cash costs estimated in the low-$US900 per once range.