B2Gold unveils $90 million royalty package sale

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B2Gold Corp. [BTO-TSX, BTG-NYSE, B2G-NSX] has agreed to sell a portfolio of 10 precious and base metal royalties to privately-owned Sandbox Royalties, which is changing its name to Versamet Royalties.

Under the agreement, Versamet will acquire royalties in return for issuing 153.2 million common shares to B2Gold for 80 cents a share, representing an equity ownership interest in Versamet of 33%, valued at $90 million.

The royalty package consists of the following:

  • 7% net smelter return royalty on the Kaika Gold project, owned by West African Resources Ltd. [WAF-ASX];
  • 7% NSR royalty on the Toega Gold Deposit, owned by West African Resources Ltd.;
  • 0% net profit royalty on the Quebradona Project, owned by AngloGold Ashanti Ltd.’s [AU-NYSE, ANG-JSE, AGG-ASX]
  • 0% NSR royalty on the Mocoa Project, owned by Libero Copper & Gold Corp. [LBC-TSXV, LBCMF-OTCQB, 29H-DE].
  • 5% NSR royalty on the Primavera Project, owned by Calibre Mining Corp. [CXB-TSXV, CXBMF-OTC], and five additional exploration stage royalties.

B2Gold said it has retained ownership of the 22.5% silver royalty on Glencore Plc’s Hackett River project, on which Versamet owns a 2.0% NSR royalty. B2Gold said it will continue to explore value maximizing alternatives for the B2Gold Hackett River royalty.

“This strategic partnership provides B2Gold with an attractive opportunity to unlock the value of our royalties which have gone largely unrecognized by the market and were not a core part of our business,’’ said B2Gold President Clive Johnson. “As a significant shareholder, B2Gold is pleased to retain meaningful upside exposure and leverage to Versamet as its experienced management team stewards its strengthened asset base and continues executing on its growth strategy to create future shareholder value.’’

The closing of the first phase of the transaction occurred on June 5, 2024, and included the royalties on the Kaika Gold Project, the Toega Gold Deposit, and Primavera Project, and two exploration stage royalties. In connection with the first phase closing, B2Gold received 122.0 million shares of Versamet worth $72 million. The remaining royalties are subject to various right of first refusal or right of first refusal offer provisions, which are expected to lapse or be exercised within the next 60 days, at which time the closing of the second phase of the transaction is expected to occur.

An investors rights agreement entitles B2Gold to nominate one member to Versamet’s board of directors and pro rata participation rights in relation to future capital raises. Versamet’s portfolio now includes 28 royalties, including two which are cash flowing and several of which are expected to be cash flowing the near term.

B2 Gold shares were virtually unchanged on the news, easing 0.27% or $0.01 to $3.74. The shares trade in a 52-week range of $5.24 and $3.18.

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