B2Gold increases stake in Colombia joint venture

B2Gold’s Masbate Mine.

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B2Gold Corp. [BTO-TSX; BTG-NYSE] and AngloGold Ashanti Ltd. [AU-NYSE; AGG-ASX; ANG-JSE] said Monday September 16 that they have agreed to amend the ownership and management structure of their Gramalote gold joint venture in Colombia.

The companies have agreed that B2Gold will sole fund the next $13.9 million of expenditures on the Gramalote Project, after which B2Gold’s project interest will increase to 50% from 48.3%, leaving each company owing half of the project.

B2Gold will then start an immediate transition to become manager of Gramalote by the end of 2019. However, each company will continue to have equal representation on the joint venture management committee. After B2Gold has spent the sole fund amount, each partner will fund its share of costs on a pro rata basis.

The Gramalote Project is located 230 km northwest of Bogota and 80 km northeast of Medellin in central Colombia. Based on a recent remodelling of the Gramalote resources, B2Gold said it believes the project has the potential to become a large low-cost open pit gold mine.

It said Gramalote has several key infrastructure advantages, including a reliable water supply, proximity to a national highway, electricity grid and access to a technically capable workforce.

The project has a measured and indicated resource of 162.6 million tonnes, grading 0.75 g/t or 3.9 million ounces. On top of that is an inferred resource of 125.2 million tonnes, grading 0.52 g/t gold or 2.1 million ounces.

B2Gold and AngloGold have agreed to a budget for a feasibility study, costing up to $40 million through the end of 2020. The budget will fund 42,500 metres of infill drilling and 7,645 metres of geotechnical drilling for site infrastructure. This drilling is expected to be completed by the end of May, 2020.

On Monday, B2Gold shares advanced 1.7% or $0.07 to $4.23 on volume of 2.56 million. The shares are currently trading in a 52-week range of $2.81 and $5.36.

Based in Vancouver, B2Gold is a senior gold producer with five operating mines and numerous exploration and development projects in various countries, including Nicaragua, the Philippines, Namibia, Mali, Burkina Faso, Colombia and Finland.

Its roster of producing mines includes the Fekola Mine in Mali, West Africa, the Masbate Mine in the Philippines, and the Otjikoto Mine in Namibia. That’s in addition to the two mines in Nicaragua.

In the second quarter, B2Gold benefitted from the strong performance of its Fekola and Masbate mines. Fekola and Masbate produced 114,000 ounces and 57,600 ounces respectively.

B2Gold reiterated its 2019 production guidance and said it is expected to hit the low end of its forecast of between 935,000-975,000 ounces. The estimate follows the expected sale of the Nicaraguan assets in the fourth quarter of 2019.


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