B2Gold Corp has entered into a definitive merger implementation agreement with Papillon Resources, pursuant to which both companies have agreed to combine at the agreed exchange ratio of 0.661 B2Gold common shares for each Papillon ordinary share held.

The merger consideration represents a purchase price of about Aus$1.72 per Papillon share and values the transaction at approximately US$570 million. Papillon has been in a trading halt since May 26, 2014, following receipt of an indicative non-binding proposal from B2Gold on May 24 which included a proposed merger ratio.

The merger will be implemented by way of a Scheme of Arrangement under the Australian Corporations Act 2001. Upon completion of the scheme, existing B2Gold shareholders and former Papillon shareholders will own approximately 74% and 26%, respectively, of the issued common shares of the combined company.

The combination of B2Gold and Papillon will result in a company with a significant growth profile beyond its three operating mines, which collectively produced 366,000 ounces of gold in 2013 at a cash cost of US$681 per ounce and an all in sustaining cost of US$1064 per ounce. B2Gold’s production is projected to increase to about 550,000 ounces by 2015 as the low cost Otjikoto mine in Namibia is scheduled to commence production in late 2014.

The combined company will be focused on furthering the development of the Fekola project in Mali, and continuing to operate B2Gold’s existing Masbate gold mine in the Philippines and Limon and La Libertad gold mines in Nicaragua. Further, B2Gold will possess a strong growth profile through its Otjikoto project, the Kiaka project in Burkina Faso and its Gramalote project (51% AngloGold Ashanti/49% B2Gold JV) in Colombia.

B2Gold will have the management, development, construction, operational and in-country experience combined with the funding capacity to optimize the development of Fekola. B2Gold is one of the few mining companies with a proven in-house construction team with a track record of building high quality plants and infrastructure while reducing capital costs. In addition, B2Gold has a highly regarded and experienced exploration team that sees significant exploration potential at Fekola in addition to B2Gold’s existing assets.

“At B2Gold, we are excited about the merger with Papillon as it will add the high grade Fekola project to our rapid growth as a profitable gold producer. We believe this merger will bring great value to all shareholders and we congratulate Papillon’s strong technical team on advancing the impressive Fekola project to a robust pre-feasibility study and look forward to working together to advance the project to production,” says B2Gold’s president and CEO Clive Johnson. www.b2gold.com

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