Calibre Mining to buy B2Gold’s Nicaragua mines

Exploring the Calibre Mining/B2Gold Monte Carmelo Project in Nicaragua. Source: Calibre Mining Corp.

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B2Gold Corp. [BTO-TSX, BTG-NYSE] is reducing its exposure to Nicaragua by agreeing to sell its El Limon and La Libertad mines to Calibre Mining Corp. [CXB-TSXV, CXBMF-OTC] for US$100 million.

Under an agreement announced on July 2, 2019, B2Gold will receive US$40 million cash on closing, US$40 million worth of Calibre Mining shares, US$10 million in convertible debt, and another US$10 million cash one year after the deal closes.

As a condition of closing, Calibre will undertake a $100 million equity placement. It will also require shareholder approval for the acquisition of the Nicaraguan assets.

As a result, B2Gold expects to wind up with a 35% interest in Calibre (including the exercise of the convertible debenture), a company that owns a 100% interest in over 413 km2 of mineral concessions in the Mining Triangle of Northeast Nicaragua, including the Primavera gold-copper project and Santa Maria gold project.

Additionally, the company has optioned to Iamgold Corp. [IMG-TSX; IAG-NYSE]  (176 km2) and Centerra Gold Inc. [CG-TSX, CAGDF-OTC]  (353 km2) concessions covering an aggregate area of 429 km2 and is a party to a joint venture on the 33.6 km2 Rosita D. gold-copper-silver project with Rosita Mining Corp.

Major shareholders in Calibre include B2Gold Corp., Pierre Lassonde, and management. Prior to a trading halt on Tuesday, Calibre shares were priced at 58 cents and trade in a 52-week range of 30 cents and 75 cents.

B2Gold shares eased 1.76% or $0.07 to $3.91 on volume of 2.08 million. The shares are trading in a 52-week range of $2.77 and $4.40.

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.

The company has been widely tipped as a takeover target in the wake of the recent takeover of Goldcorp. by Newmont Mining, resulting in the formation of Newmont Goldcorp Corp., [NGT-TSX, NEM-NYSE], and Barrick Gold Corp.’s [ABX-TSX, NYSE] merger with Randgold Resources Ltd.

B2Gold had better than expected first quarter gold production of 230,859 ounces, a figure that was 6% above budget and driven by strong results from the company’s Fekola Mine in Mali, West Africa.

Consolidated gold revenue in the first quarter was $302 million on sales of 232,076 ounces at an average price of US$1,300/oz, compared to $344 million on sales of 259,837 ounces at an average price of US$1,325 an ounce in the equivalent 2018 quarter.

Libertad and Limon are expected to produce 150,000-160,000 ounces of gold this year, a number that equates to 16% of B2Gold’s estimated total production in 2019.

The shareholder meeting and closing of the transaction is planned to take place by early October 2019. B2Gold will appoint one nominee to Calibre’s board of directors (and will maintain the right to appoint a director as long as its equity ownership in Calibre exceeds 5%).

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