Canadian gold producer B2Gold has signed a purchase and sale agreement to divest a portfolio comprising 10 precious and base metals royalties to returns-focused metals royalty company Sandbox Royalties.
As part of the deal, Sandbox Royalties has been renamed as Versamet Royalties.
Under the terms of the agreement, Versamet Royalties will acquire the portfolio of royalties by issuing 153.2 million common shares to B2Gold at a price of C$0.8 ($0.58) per share.
The consideration of the all-stock deal represents a 33% equity ownership stake in Versamet Royalties for B2Gold, valued at approximately $90m.
B2Gold’s royalties portfolio includes 2.7% net smelter return (NSR) royalty each on the Kiaka gold project and Toega gold deposit, both owned by West African Resources along with a 2% net profit royalty on the Quebradona project owned by AngloGold Ashanti.
It also comprises a 2% NSR royalty on the Mocoa project owned by Libero Copper & Gold, a 1.5% NSR royalty on the Primavera project owned by Calibre Mining, and five additional exploration stage royalties.
Besides, B2Gold has retained ownership of the 22.5% silver royalty on the Hackett River project owned by Glencore. Versamet Royalties holds a separate 2% NSR royalty on the same project.
B2Gold intends to continue exploring opportunities to maximise the value of its Hackett River royalty.
The first phase of the transaction was completed on 5 June 2024. It included the royalties on the Kiaka gold project, the Toega gold deposit, the Primavera project, and two exploration stage royalties.
For the first phase closing, B2Gold received 122 million shares of Versamet valued at about $72m.
The remaining royalties are contingent upon various right of first refusal or right of first offer provisions, anticipated to lapse or be exercised within the next 60 days. Once these provisions are resolved, the closing of the second phase is expected to take place.
B2Gold president and CEO Clive Johnson said: “This strategic partnership provides B2Gold with an attractive opportunity to unlock the value of our royalties which have gone largely unrecognised by the market and were not a core part of our business.
“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.”
For the transaction, RBC Capital Markets is acting as B2Gold’s financial adviser and McCarthy Tétrault is serving as legal counsel.
