Canadian miner B2Gold will pay Can$1.1 billion to CGA Mining to secure access to the Philippines’ largest gold mine. The merger will create a global mid-tier gold producer on an agreed exchange ratio of 0.74 B2Gold shares for each CGA share, with B2Gold ending up with 62% and CGA 38% of the combined company.

CGA’s flagship 3-million ounce Masbate Island mine is expected to produce 200,000 ounces of gold for the 2012/13 financial year.

B2Gold says the deal will see its total production ramp up to 350,000 ounces for 2012, which is a significant increase on earlier projected production of 185,000 ounces in 2013.

“The deal will add to reserves, production, cash flow and earnings. It becomes accretive to us as we get into the first quarter of next year on an earnings basis,” says B2Gold’s chief executive officer Clive Johnson.

The combined company will have proven and probable reserves of 3.9 million ounces of gold between the Masbate mine and B2Gold’s existing Limon and La Libertad gold mines in Nicaragua. Masbate is expected to produce 200,000 ounces of gold over the 12 month period ending June 30, 2013.

Clive Johnson says B2Gold is well positioned to operate and progress further development at Masbate given its strong funding capacity and a management team with significant exploration, mine development and operating experience.

"We believe CGA and its flagship Masbate mine offers B2Gold shareholders immediate leverage to a significantly larger combined production profile. With this transaction, B2Gold has taken a major step towards cementing itself as a leading gold sector consolidator, providing for geographic and operational diversity while contributing significant cash and future cash flow towards B2Gold’s exciting development projects. We have great respect for what CGA has built and look forward to working with this exceptional team,” he says.

CGA’s president Michael Carrick says the transaction gives shareholders the opportunity to incorporate with a management team who have a demonstrated track record of success and value creation. “B2Gold has a remarkable development profile ahead, and Masbate will play a key role in bringing those projects to fruition. We are pleased to be a part of B2Gold’s platform of growth, discovery and superior performance.”

www.b2gold.com or www.cgamining.com

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