Canadian gold miner B2Gold has agreed to acquire Sabina Gold & Silver, the 100% owner of Back River gold project in Nunavut, Canada in an all-stock deal worth around C$1.1bn ($824.5m).
As per the terms of the deal, each share of the Canada-based Sabina Gold & Silver will be exchanged for 0.3867 shares of B2Gold. The exchange ratio values each of the former’s shares at C$1.87 ($1.4).
The Back River gold project is made up of five mineral claims blocks along an 80km belt. The Goose gold mine is the most advanced project in the gold district, which, is fully permitted and ready for construction, with first gold expected to be poured in 2025.
According to B2Gold, the Goose gold mine has been de-risked with substantial infrastructure in place as of now.
B2Gold said that it has strong northern construction know-how and experience to deliver the Goose project and the financial resources to build the significant gold resource endowment at the Back River project into a large mining complex with long life.
B2Gold president and CEO Clive Johnson said: “The Back River Gold District has multiple high-potential mineralised zones which remain open, and we are confident that the district has strong untapped upside with numerous avenues for resource growth.
“Our extensive due diligence reinforced the scarcity of a gold district of the quality of Back River, as well as the excellent work that the Sabina team has completed to date in taking the asset from an exploration project to a near-term operating mine.”
The deal will be executed through a court-approved plan of arrangement under the Business Corporations Act (British Columbia). After its closing, existing B2Gold shareholders will own a stake of around 83% in the enlarged mining company, while Sabina Gold & Silver’s shareholders will own the remaining stake of about 17%.
Sabina Gold & Silver president and CEO Bruce McLeod said: “The execution of the Goose project by Sabina did not come without risk to Sabina as a single asset, junior development company with capital constraints.
“With a two-year construction period until first gold production, we believe that additional value can be unlocked by participating as shareholders of a major gold producer with the northern experience and financial resources to optimise the Goose project and this prolific belt.”
The deal is expected to close in Q2 2023, subject to Sabina Gold & Silver’s shareholder approval, regulatory approvals, and other customary conditions.
